Capitalism's parasitic glory
by Anna Pha After months of hiding in the backrooms dodging the GST flack, a jubilant Treasurer Peter Costello emerged last week talking up the economy and looking and sounding more and more like a future Prime Minister. Costello talks as though no recession is in sight, as though economic growth will continue unabated, inflation is under control and unemployment is on the way out. The pride and joy of Costello's mid-year budget review, however, is Treasury's estimates of a $4.3 billion budget surplus this financial year and a $4.7 billion surplus next year. These surpluses come on top of the more than $50 billion already shaved from recent budgets. Music to the markets' ears! But where did this surplus come from? Is it any reason to celebrate? The budget surplus is a direct result of a massive redistribution of wealth that has been under way for close to 10 years now. The process has been accelerated under the Howard Coalition Government. This redistribution is taking place via changes in the taxation system, cuts to spending on public services, introduction of user pays and privatisation. The changes to the taxation system have included reductions in the rate of tax on corporate profits and on the incomes of the rich plus the failure to address tax dodges such as through family trusts, negative gearing and dividend imputation. The GST has increased the tax burden of those on low and middle incomes, but these increases have been nowhere near fully compensated by the tax cuts in other areas. As a result the government is actually restructuring the system to bring about a real reduction in taxes collected. While there is no shortage of money for handouts to private schools and the private health system or to corporate sector, funding on social and community services is being wound back, reducing government spending by billions of dollars. The national broadcaster, the ABC, has had around $90 million cut from its budget since the Howard Government's election in 1996. The Government is also planning to increase military spending by around 40 per cent over the next ten years — money that will come out of a shrinking budget at the expense of people's needs. Age pensioners, the unemployed, workers, students, the homeless and the sick are on the receiving end of the cuts. As reported in last week's Guardian ("$170M rip-off") the government "saved" — in fact stole — $170 million from the pockets of unemployed workers, students and others for minor breaches to social security rules. Unemployed youth are being fined up to $1,300 by Centrelink for minor breaches, pushing many of them into homelessness and the most acute poverty. Quite often the lack of a home address has played a part in their failure to meet Centrelink requirements. Charities report daily on the rise in demand for services from desperate families trying to survive on inadequate incomes. A report by the Smith Family has found that one in four poor Australians are part of a growing class of working poor. An estimated 2.4 million Australians live in poverty — a direct result of the very government policies and corporate greed that has brought about the budget surpluses. According to the Smith Family report 42 per cent of poor families have one or both parents working. Many of them are in casual or part-time employment. Many low paid workers have suffered a drop in earnings, a direct result of Workplace Relations Minister Peter Reith's attack on trade unions and the introduction of individual work contracts and the stripping back of awards. As a result of this heightened exploitation, the big corporations are reporting large increases in profits without corresponding increases in the amount of revenue from sales. Business Review Weekly (November 17, 2000) points out that the top 25 corporations (in Australia) increased their revenue (from sales, etc) by 13.7 per cent last year, but their net profit after tax was up 47.2 per cent, "meaning companies are extracting more profit from their revenue". This additional profit comes straight out of the pockets of workers and through tax cuts and tax avoidance. Every bank or corporate merger or takeover, and every privatisation is accompanied by thousands of job losses and another attack on workers' wages and working conditions and the increased enrichment of major shareholders and directors counted in billions of dollars. The official unemployment figures might be down thanks to casualisation and under-employment that are at their highest level for decades, and by forcing people off the unemployment lists. More people than ever are hurting as the government's policies take their toll. The politics behind the surplus are criminal by their very nature, facilitating as they do the increased exploitation of labour and the unbridled plunder of publicly-owned assets and the nation's wealth by a handful of transnational corporations. Peter Costello is actually celebrating capitalism in all its parasitic glory.