There is no denying that money buys power and influence. That has always been the case.
Money can keep illegitimate governments in power – it propped up Saddam Hussein’s regime, including Australian money that came from AWB. At the time the Howard government sent us to war in Iraq while at the same time turning a blind eye to allowing the regime they were fighting to be funded by an Australian country. This period has been thrown into further controversy recently with the release of the findings of the Chilcot inquiry - a report which made adverse findings against the Howard government, and which brought a robust defense from Howard himself. Interestingly, we have still not had an inquiry in Australia into what took us to war.
As they say in government - only hold an inquiry if you already know the outcome and you are sure it won't hurt you.
The Pacific Solution came about because Australia was able (and is still able) to bribe nations like Nauru to deal with a political problem such as refugees. But the damage to democracy extends beyond our shores. Nauru was essentially a failed state when the Howard government started pouring millions of Australian dollars into their economy to help run his Pacific solution.
Outside the moral issues of outsourcing our international responsibilities, this created a different issue. It made Nauru less dependent on foreign aid, which might at first blush seem to be a positive. But what this has done is to make them less accountable... as with foreign aid comes the need for levels of transparency. As Tess Newton Cain has highlighted - the removal of independent office holders (like the commissioner of police and the resident magistrate) has coincided with the new-found financial independence. As Tess states:
...with hindsight, it appears that the ‘Pacific Solution’ has contributed to a ‘perfect storm’ with the government having increased funds available at a time when those in power are actively seeking to throw off the perceived shackles of good governance.
Murdoch’s money and the media empire he built with it gives him a voice and influence well beyond what he would otherwise have. Gina Reinhart’s ideas were heard not because they are insightful, but because she was the richest woman in Australia. Clive Palmer built a profile, a voice and eventually a short career in parliament based on the money he spent in 2013. And for a brief time he had a powerful voting block in the Senate which was hugely influential.
The North Sydney Forum raised a lot of money for Joe Hockey’s political aspirations by selling access if not influence when he was Australia’s treasurer. It opened up many questions which were never sufficiently answered, as well as exposing connections to the corrupt Australian Water Holdings and people like Nick Di Girolamo (who gave Barry O'Farrell the $3000 bottle of Grange Hermitage that ended O'Farrell's political career) and Senator Arthur Sinodinos (whose selective memory seems to have saved his political career)
Political fundraisers for both major parties involve attendees paying ridiculous sums of money per ‘plate’. And while I’m sure the food is good, there is no doubt that what is being paid for is access and potential influence
It also seems that recent governments and their policy settings have been heavily influenced by money - either through donations or through money spent campaigning against them.
Back in the mining super-profits tax days, a large amount of spending from foreign owned mining interests was able to change government policy through the influence it was able to exert through advertising.
But very recently money has potentially decided who formed government. It is reported that quite late in the campaign at a time when a Liberal insider said 'The Party is broke. There is no money' Malcolm Turnbull donated $1M effectively trying to get himself re-elected as PM.
Government representatives are bemoaning policy setting on Superannuation and the impact it had on both the election result and donations. In the wake of the election result Eric Abetz has called for changes to the government's policy on Superannuation as he believes this was the message the election result sent. Abetz's comments were reported on the saveoursuper.org.au website. Clearly not an independent news site.
What the website didn't report was that there was actually no evidence for this claim.
The Australian quotes Senator Ian McDonald as saying (about the Superannuation policy taken to the election):
It also severely impacted our fundraising because most of those affected and even those who weren’t affected but were concerned that they might have been were traditionally our supporters and very often our very good donors.
McDonald is linking policy settings to donations, and while he isn't overtly calling for policy changes to ensure donations keep flowing, you do wonder why he makes the point.
The recent changes made by the Queensland government to ensure political donations are revealed in real time are a welcome change and are one step towards handing democracy back to everyone, not just the rick and the well-connected.
There isn't a democracy on the planet which suffers from too much transparency, and we should be calling for more of it. The Greens are one of the few political parties which are calling for a Federal ICAC and the banning of political donations.
They are next steps we need to take to shore up our democracy and wrest back some power from the wealthy and the well-connected.
by Mark Enders
The take home message from the recent budget was jobs and growth. We know this because Scott Morrison repeated this mantra 13 times in a 30 minute speech. He also repeated the word plan 21 times, as if to reinforce the idea that economic thought bubbles (like giving States taxing powers) were a thing of the past. And following the speech, Liberal MPs dutifully followed their talking points and repeated key words Ad Nauseum, without actually saying very much.
The only plan the government seems to have is to cut tax for small business and the wealthy, and, over the next 10 years, cut tax to bigger and bigger businesses.
But where is the evidence that this approach leads to more jobs?
And, setting aside for a moment the significant problems of advocating for never-ending growth on a resource-constrained planet, where is the evidence that it leads to growth?
Mike Seccombe pulls the ‘tax cuts leads to more jobs and growth’ approach apart in The Saturday Paper.
In 2012, the US Congressional Research Service looked at the effect of reducing income tax rates since 1945.
It found that, in 1945 the top marginal tax rate was 90% but by 2012 it was 35%, and stated: “Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment or productivity growth.”
It also found that “the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution”.
The Research Service also found that the approach increased growth in inequality (an issue we touched on in a previous blog).
But what about the Australian experience?
Investment - Bureau of Statistics data show that, since 1960, private business investment in Australia has trended slowly down as a share of GDP. Before the late 1980s, corporate tax rates averaged well above 40%. Since then, have been progressively reduced to 30%. But there has been no increase in investment as a result.
Economic growth - Up to 1988, the economy grew, on average, by 3.8% a year. Following reductions in corporate tax rates, growth dropped to 3% and is currently forecast at 2.5%.
Employment and Wages - The data show unemployment rates were lower when corporate taxes were higher, and that, since company tax rates have been lowered, the share of GDP going to wages has declined.
This government has asked as a part of its re-election pitch… who do you trust on the economy?
A sane person certainly wouldn’t trust the Coalition, given the deterioration we have seen since they took charge.
I would suggest putting more faith in a Nobel prize-winning economist such as Joseph Stiglitz who says it is “Those at the top spend far less than those at the bottom, so that as money moves up, demand goes down.”
Numerous Coalition policies are shifting wealth towards the top… to those who won’t spend. It doesn’t take a rocket scientist (or a Nobel Prize winning economist) to tell you that their plans will have disastrous economic outcomes for most Australians.
It’s a recipe for more job losses, less growth, more inequality and social problems, growing deficits, and even more tax cuts for the wealthy.
Who can we trust on the economy… not Scott Morrison for one. And although you wouldn't know it if your only news was from the mainstream media... the Greens do have an economic plan.
by Wendy Tubman
While the biggest story around the world is tax havens run by a Panamanian law firm, our major parties are silent on changing the status quo.
Less than 12 months ago Joe Hockey was famously saying: the rich pay too much tax, and poor people don't pay much fuel excise. And Hockey himself felt his greatest contributions were his preference for lifters over leaners, and ending the age of entitlement.
Hockey was wrong time and time again, and when he was pointing the finger at who he thought the leaners were... he was clearly pointing at the wrong end of town.
Our current treasurer is focused on spending cuts because we must live within our means and we can't afford a strong social safety net, the best health care for all Australians, a decent education which targets resources to the neediest, and we certainly can't afford real action on climate change.
Labor's Andrew Leigh is someone whose writing and research I have admired for some time. Not so long ago he was deeply concerned about the growing gap between the rich and poor, publishing Battlers and Billionaires. He put forward a compelling argument for more effective wealth distribution. But now he is willing to do little more than “carefully consider proposals for making information regarding all companies available on a public register”
But responses to the most wealthy avoiding their share of the tax burden are bad all over. David Cameron had suggested that he was serious about multi-nationals' tax avoidance, and then he revealed he profited from dodging tax himself.
The Chinese are censoring information that relates to their families' tax dodging activities.
Iceland's Prime Minister was forced to step down over his activities.
Our biggest companies are doing it. BHP-Billiton - as revealed by 4 Corners loans money to itself from an off shore shell company. The interest payments it makes to itself are tax deductable, the interest the shell company receives disappear into a tax haven.
News Corp received a $882M tax refund in 2014 by shuffling papers.
The scale of the problem is alarming, not just for Australia but for the planet. The ABC reveals that Tax havens account for 50% of all world trade.
According to the data gathered by Andrew Leigh, the rich spend their money on: sports cars, private air transport, bottles of Penfolds Grange Hermitage, first class airfares or perhaps Virgin Galactic Space flights, private treatments, private resorts, memberships at exclusive private clubs... all while keeping their tax affairs exceedingly private.
What makes this kind of behaviour completely abhorrent is that these taxes foregone by governments means less can be spent on: alleviating poverty, addressing the fallout from natural disasters (which are becoming more frequent), real action on climate change, fast tracking innovation and our transition to the new economy and a clean energy future, building infrastructure like public transport (which is a great social equaliser), adequately funding schools and universities, and better health outcomes all over our planet.
And this growing inequality is driving conflict, which in turn drives refugees, which we respond to by attacking the victims in all this.
And although all this activity is mostly legal (but shouldn't be), the somewhat ironic thing is that the same loopholes the very wealthy are using (legally) to hide their wealth are being used by criminals to hide their ill-gotten gains. It has to stop... we can't afford it.
So what to do?
Get angry. Stay angry. And let the decision makers know that rather than there being no other option than to cut services (or increase debt)... there is no other option than ensuring EVERYONE pays their fair share of taxes.
It's time to turn the world's leaners back into lifters again.
by Mark Enders
We have started this blog with a few aims in mind, and plan to conduct ourselves on this site way in a number of principled ways. Should we stray from our purpose, or not behave in the manner in which we have stated we would, we expect you to call us out on that.
Why a Blog is necessary
Sadly we are all swimming in a sea of information and misinformation. That creates confusion, and misunderstanding, and in the worst cases... deception. We believe in the wisdom of people and the sense of the electorate, but we can hardly expect people to be wise or rational if they are constantly fed misinformation. Our blogs will reference other independent sources of information so you can trust in the fact that what we say is backed up by others, and by good, hard evidence.
And when there is so much information out there, it is too easy to miss something important. Rather than not being able to see the forest for the trees, we are left unable to see the tree for the forest.
A blog is also an opportunity to have a discussion. Rather than sitting back and being passively fed information, in the comments section you have an opportunity to agree, disagree, or even add something to the debate. Perhaps you're aware of important information we've missed and that everyone should be aware of.
We will focus on issues that matter to North Queenslanders, to Australians, and to our neighbours near and far. We will seek to inform rather than mislead. We want to engage - which means each post on the blog is a conversation starter. We want to hear many different opinions but will not allow bigoted, defamatory, overly aggressive or nasty posts to remain. All conversations associated with the blog should try to remain calm, rational, open and honest. It is possible to be both passionate and respectful.
I believe this is the start of something very interesting.
by Mark Enders
The Townsville Greens will publish blogs considered to be of merit. The opinions expressed are those of the Author.