Moore / How the bosses ‘game’
workers
“In Australia, the bottom 3.9
million people share the same level of wealth as the top 10 individuals. And
the gap is growing.
WHEN was the last time we
heard someone talking about economic sustainability?
by Michael Moore
When was the last time an
economist was heard talking about equitable sharing of the economic growth?
Australia “averted a
recession” with 1.1 per cent growth in the December quarter. Let’s celebrate!
Good news. Well, good for some. Not so good for others. Increasing disparity!
The good news: company profits
are “at record levels”. In the December quarter company profits rose by a
whopping 20.1 per cent. One of the big winners is mining. Mining! Those same
companies who were crying doom and gloom a few years ago when they defeated the
government’s attempt to apply some level of taxation on their “super profits”.
The bad news: well, that is
for wage earners. While profits grew by 20 per cent, average wages dropped.
Tom Kennedy, of JP Morgan,
explained to the ABC: “Some of the support for profits in the non-mining
economy seems to be from weaker wage payments, which fell 0.5 per cent
quarter-on-quarter (annual run rate slowed further to 1 per cent year-on-year)
on the precarious combination of weaker wage growth, fewer hours and elevated
underemployment.”
In simple language Kennedy
could have said: business increased profits by cutting workers’ wages, reducing
hours and by employing less people.
Any number of economic inquiries or reports suggest good ideas about taxation, employment and economic growth. A much smaller number examines what is equitable sharing of wealth.
Any number of economic inquiries or reports suggest good ideas about taxation, employment and economic growth. A much smaller number examines what is equitable sharing of wealth.
Even in the current climate,
where the government is constantly bombarding the community about living within
our means, Turnbull’s government is determined to deliver a $50 billion tax
break for the corporate sector. They have a good return on investment for
political party donations.
In Australia, the bottom 3.9
million people share the same level of wealth as the top 10 individuals. And
the gap is growing.
Sensible taxation measures are
just one method of reducing the disparity by applying straightforward rules
that are not subject to exemptions.
In a globalised environment,
corporations avoid current tax measures by moving money around the world at a
touch of a button. One alternative, to provide a fair way to levy the corporate
sector and one that is difficult to “game”, is a tax on gross turnover within a
country. Such a tax is simple. It is hard to avoid. Big business would pay
their share and contribute to community infrastructure from which they draw
significant advantage.
Personal income is also
“gamed”. American tycoon Warren Buffett noted his secretary paid a higher
percentage of income tax than him simply because he could afford better
accounting advice.
The answer is to apply a
“floor level” for high-income earners. It would catch the 77 individuals,
identified by the Australian Tax Office in 2015, who earned over $1 million and
paid NO tax.
With the “Buffett Rule”, this
group of selfish leeches would not have been able to avoid their fair
contribution to the education, health and infrastructure that they all use. The
Australia Institute identifies an injection of $2.5 billion if a 35 per cent
“Buffet Rule” level was applied to just the top 1 per cent of salary earners.
Surely good government means
finding ways to reduce disparity. Inequality is fodder for populist movements
around the world. A disparity index is just one way to remind our politicians
of their responsibilities.
[Michael Moore is a former member
of the ACT Legislative Assembly and an independent minister for health in the
Carnell government. He has been a political columnist with CityNews since 2006.]
