Ongoing class warfare.

Upper income earners will be the biggest beneficiaries over the next seven years with the recent tax cuts. Average total earnings for employees are about $62,000 a year. Moving to  a flat marginal tax rate of 32.5% for incomes from a low $41,000 a year to a high of $200,000 is a massive attack on our progressive taxation system. It decisively favours the wealthy at a time when we are seeing disturbing increases in inequality.

To defend this largesse for the wealthy, Malcolm Turnbull tells us that the Coalition ‘believes in aspiration’. He tells us that the tax changes are ‘good for working families’. That is  privilege speaking. It is not good for most families and aspiration is not peculiar to the wealthy friends he serves. We all want to improve and do well. And aspirations are not just about more money. They  include relationships and quality of life like clean air, clean water, liveable cities and a healthy planet. They also include aspirations, indeed rights we all have for ourselves and our families,  for equal access to good education, good health care and good housing. We are citizens, not just taxpayers.

People from privileged backgrounds like Malcolm Turnbull have little appreciation of other people’s aspirations and needs. They think everyone starts life like themselves on third base. If only lazy people were more aspirational and worked harder. Without any doubt Malcolm Turnbull and his wealthy mates are winning the class war in Australia.

But to disguise their activities in creating more inequality they blame the victims  for not being aspirational enough and their advocates who protest about unfair treatment of waging class war.

These are classic examples of what the billionaire investor, Warren Buffett, said in describing class war in the USA. “There’s class war, all right, but it’s my class, the rich class that’s making war, and we’re winning.”

Class war in Australia

Malcolm Turnbull and his rich banker and other mates are waging class war in Australia in cooperation with a pliant Murdoch media.  And they are winning. To disguise their greed they accuse those who seek justice of being instigators of class war and political agitators.

This undermining of progressive income taxation by the Turnbull Government is only part of a class war that the rich and powerful, along with their lobbyists, have been initiating and winning in Australia.

There is a long list of examples of successful class warfare by the wealthy in Australia :

• There is massive tax avoidance, particularly for the benefit of large multinational companies whose benefit for Australia is grossly exaggerated.
• The Coalition successfully protected miners and polluters from the Mineral Resources Rent Tax and the Carbon Tax.
• Through negative gearing and capital gains concessions, older and wealthy property owners in Australia benefit at the expense of the young and people on low incomes. According to the Grattan Institute, governments provide over $36 billion p.a. in benefits to the predominantly wealthy through exemptions from land and capital gains tax and other concessions.
• The government facilitates superannuation arrangements that have become a vehicle for massive tax avoidance. Thanks to the time-bombs that Peter Costello planted, many people who have low or no taxable incomes are very wealthy and own a lot of property.  According to Treasury, over $30 billion p.a. is the cost of numerous superannuation concessions.
• Fearful of a Royal Commission, the banks, with their enormous profits and obscene executive salaries, were defended to the last by the Turnbull Government. The terms of the Royal Commission were calculated to cause as little embarrassment to the banks as possible.  But even this didn’t hide the malfeasance  and greed of the banks.
• There are incessant government campaigns against penalty rates, minimum wages and the role of trade unions.
• As part of its class warfare, the government has skewed education funding to favour wealthy schools at the expense of disadvantaged children across the country.
• In furtherance of its campaign to help the privileged, the government promotes a $12 billion p.a. taxpayer subsidy for private health insurance.

Yet the government, with the support of News Corporation, has the gall to blame those seeking fairness and social justice of engaging in class war.

Political envy or social justice?

They have picked up the fake storyline of John Howard who criticised his political opponents of  ‘political envy‘ in wanting to redress injustice in the community.

Both Malcolm Turnbull and Scott Morrison loudly accuse the ALP and its supporters of waging class warfare whenever those who seek social justice have the temerity to raise their voices.

Blaming the victims is an old and tried tactic.

Michael Stutchbury in the Australian Financial Review, in defending the 2016 Budget, dismissed the critics as participating in a ‘faux class struggle’.  Peter van Onselen in The Australian accused Bill Shorten of conducting an ‘ugly class war’.  Loyal-as-ever to Rupert Murdoch, Dennis Shanahan and Paul Kelly both claimed that ‘Labor runs a class warfare campaign’.

The Herald Sun and The Australian called Bill Shorten’s proposed reform of dividend imputation  a ‘class war’ But they don’t describe Malcolm Turnbull’s tax cuts for the wealthy in the same way.

To defend their power and privilege, the wealthy revert time and time again to attacking the disadvantaged or those who support them. The status quo which the elites represent must be defended at all costs by attacking any attempt to improve the lot of the less privileged.

This attack on those who seek social justice is a deliberate attempt to avoid the truth of which Warren Buffett speaks. The wealthy in the US and Australia are initiating and winning the class war.

We now await the next stage in the class war waged by the wealthy, the $65b company tax cuts.

Reprinted from Pearls & Irritations, John Menadue’s blog of 23 June 2018.