05 | 11
2011

The Swansong Budget: Screw the workers to feed the obese (miners that is!)

Categories: Accountability, Corruption, Discrimination/Racism, Mining

by: Bakchos
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The resource sector is expected to spend an historic $76 billion on mining projects next financial year, with mining investment accounting for six per cent of Australia’s gross domestic product in 2011/12.

From this investment miners will reap $203 billion in export value in 2012/13, but the looming investment boom and associated tax breaks will drag down the federal government’s share of the profits.

According to the government’s own 2011/12 budget papers:

‘Sustained high prices to Australia’s key commodity exports underpin record investment intentions in the mining sector and strong forecast growth in commodity exports…

…The mining industry is planning to invest $76 billion in 2011/12 – around eight times the annual level preceding the boom – led by the LNG (liquefied natural gas) sector.’

Tax receipts grew by 11 per cent a year during the first boom, prior to the global financial crisis, but will rise by a third less between 2012 and 2015, according to Treasurer Swan.

‘It is not expected that the strong surge in tax receipts experienced under mining boom mark I (mid-2000’s before the global financial crisis) will be replicated under mining boom mark II.’

Company tax receipts would be lower due to the higher levels of depreciation resulting from the record capital expenditure, it said.

What does all this mean for the average Aussie family?

The budget slashed $9.8 billion off the expected tax take for 2010-11, blaming the fall on the high Australian dollar and the year’s natural disasters. The weakness will extend to 2011-12. The government is expected to bring in $350 billion in revenue next financial year, but that is $6.6 billion less than its estimate just a few months ago.

Let me see miners who produce no intellectual or industrial value ads, who make their wealth solely by exploiting stolen Aboriginal assets are expected to reap $203 billion in export value in 2012/13 while government revenue falls. How is this possible?

The answer is simple, that multinational miners including BHP Billiton and Rio Tinto pay just 13 per cent company tax, while their domestic counterparts give back 17 cents in the dollar.

In May 2010 the government released data from the US-based National Bureau of Economic Research showing miners in Australia pay less company tax than they would in Canada, the United Kingdom or the United States.

The company tax rate in Australia is a flat 30%, so foreign multi-national miners are paying less than half the rate of tax that other Australian industries pay. Is this equitable?

Well it doesn’t seem all that equitable to me, but don’t take my word for it, let’s have a look at the facts:

Middle income households will help Wayne Swan return the Budget to surplus – by parting with $1.2 billion in family tax payments.

In a major redistribution of wealth from middle-Australia to the multi-national mining conglomerates, the Treasurer has announced that he will freeze indexation of family tax benefits, the baby bonus and the paid parental leave scheme for four years for families on $150,000 or more a year.

While the Government claims it would affect only 40,000 households in the first year that will rise to hundreds of thousands.

The hit on middle-class welfare, part of a $22 billion cut to spending, will be hardest felt by those described by economists as being in “mortgage poverty.” These same families also face the possibility of a private health insurance rebate means test later this year and rising electricity prices.

But the so-called “new rich” won’t be the only ones unhappy with the Budget, which has $22 billion in savings over the next four years in what Mr. Swan claimed was the most significant spending cutback since the 1980s.

The savings, in two waves, will also be used as part carrot and part stick to get legions of welfare recipients, from teenage mums, single parents, those on disability pensions and long-term unemployed, back to work.

The abolition of Dependent Spouse Tax offset for people under 40 will save $755 million and get more stay-at-home parents into the workforce. Changes to the family payments system will save the Government $2 billion.

The ‘back to work budget’

Instead of taxing multinational mining conglomerates Treasurer Swam has opted for attack the most vulnerable in our community, the disadvantaged.  Swan has introduced a swag of new proposals to make it more difficult for people to get or remain on government benefits, such as Newstart and the Disability Support Pension.

When there are jobs vacant, how can there be people receiving benefits – especially when the causes are ”easily treatable” chronic conditions such as bad backs, depression and anxiety? Easy questions to ask for those who have made a career out of sponging of the public purse via politics or the bloated and underproductive so called public service which could be more accurately described as the self-service, ‘surely’ these uninformed spongers sprout it’s:

“only commonsense that a good job will soon make these people ‘’snap out of it’’ and return to the workforce?”

Like many seemingly commonsense solutions that never work, this argument is demonstrably false. Limiting access to benefits won’t miraculously make people more employable. The Brotherhood of St Laurence argues that most long-term unemployed people, whether on the disability pension or Newstart, aspire to be part of the mainstream. They want to work. They want careers, financial security, homes, workplace friendships and status. All the things that work brings, why wouldn’t they, we all do!

We also know employers are desperate for employees. But the reality is that taking on someone who has been unemployed for several years can be a bit of an ask.

Take one common argument doing the rounds recently: that the problem could be solved by sending the long-term unemployed to Mildura to pick fruit. But the last person citrus farmers want up one of their ladders or living in a tent at the bottom of their paddocks is a 55-year-old with a slipped disc or depression – and I suggest these are the last places such people should be.

Even the most socially responsible employers are reluctant to take on such people because they know they need support for the arrangement to be mutually profitable. Fruit growers prefer carefree backpackers looking for adventure, and who can blame them?

So let’s deal in the world of realities. The real solution is the true commonsense one: rather than forcing people to apply for jobs for which they are obviously unsuited, we should be matching them to jobs for which they are properly suited and giving them the support they need to succeed.

Employers know this. As the Business Council of Australia has acknowledged, in a boom economy such as Australia’s, people are not unemployed because there are no jobs – they are unemployed because they lack the job skills employers want, or because they have chronic health issues that need to be solved. If you ran a small business and were short of labour, would you like to spend your time constantly interviewing people you know will be unable to hold down the job you have advertised?

While in fairness the government has included measures in the budget aimed at addressing these issues, they miss the mark on many levels.

Indigenous Australians

Indigenous Australians will also benefit from the Government’s Building Australia’s Future Workforce package. We are providing $228 million for additional wage subsidies and support to help very long-term unemployed job seekers get involved in participation activities such as job training and Work for the Dole. About 17 percent of very long-term unemployed job seekers are Indigenous people.

In addition, $6.1 million is being provided to Jobs Services Australia to pilot culturally appropriate mentoring supports for Indigenous job seekers when they commence work. A further $1 million will allow greater flexibility for employment service providers in remote areas to work better with job seekers, many of whom are Indigenous, to secure sustainable jobs and meet employers’ needs

Vacuous words from a vacuous government. So the government intends to throw a few crumbs by way of training and Work for the Dole initiatives while the mining industry makes obscene, tax-free profits from plundered Aboriginal resources. 17 percent of very long-term unemployed job seekers are Indigenous people. Why is this? Part of the answer lays in the fact that Australia is still a racist country.

We pretend to be otherwise but, the reality is that Australians are racist. This is one of the reasons behind why Aboriginal Australians who make up less than 2.5% of the Australian population represent 17 percent of very long-term unemployed job seekers. It’s not because we are lazy, or incapable, it’s because we are victims of racism. I have personally experienced racial discrimination in the workforce and can say without any doubt entering my mind that the public service is the most racist employer in Australia.

The public service gets away with its racism because it hides behind vacuous anti-discrimination legislation that it knows is unenforceable. Why is this vacuous anti-discrimination legislation unenforceable? Because of the lack of accountability and transparency that informs today’s public service. This is just a polite way of saying the public is rotten from the top down, it’s an institution where self comes before ethics, especially work ethics, integrity or transparency.

Let’s all sit back and watch the foreclosures roll in on the back of Swans black budget!

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