tax

May’s Speech to Rich Tory Donors: This Is What the Lollards Warned You About

Sunday is the Christian holy day, so I thought I’d include here a particularly relevant piece of radical Christian polemic against the rich and powerful and their neglect and oppression of the poor from the 15th century.

A few days ago Mike put up a piece reporting Theresa May’s speech at a fundraising banquet for rich Tory donors. To get in, you had to pay £15,000 for a ticket. The long reign of Thatcherite neoliberalism in this country has led to a massive transfer of wealth from the poorer sections of society – the working and lower middle classes – upwards to the extremely rich. Thatcher, and her fanboys and -girls – have cut and privatised benefits and services to the poor, with the specific intention of making the bloated rich even richer, though tax cuts, massive subsidies, and exploiting the very state industries, that they have privatised and sold to them.

The Lollards were a proto-Protestant sect of the late fourteenth and early fifteenth century, who followed the teachings of the Yorkshire priest and reformer, John Wycliffe. Wycliffe was disgusted by the corruption of the church and society in his day. He advocated the Bible in English, holy scripture as the only source for religious authority, clerical marriage and proper concern for the poor. And he and his followers were bitterly critical of the friars, as they were generally perceived to have neglected their vocation of teaching and preaching Christianity to focus on serving the rich for their own material gain.

The text here is ‘The Perversion of the Works of Mercy’, which inveighs against the way Christ’s commandment to feed, give drink, and clothe poor people, and visit those in prison, as well as other holy works, have been so corrupted so that those, who feign moral rectitude and Christian charity now spend their time doing this for the rich and powerful instead. Here’s an extract. You should be able to understand the late medieval spelling and vocabulary.

Hou Sathanas [Satan] and his children turnen werkis of mercy upsodoun and discyven men therinne and in here five wyttis.

First Crist comaundith men of power to fede hungry pore men. The fiend and his techen to make costy festis and waste many goodis on lordis and riche men and so suffer pore men sterve and perishe for hunger and other myschevys. Ye, men that feynen hem [them] ful of charite and religion gadren proper goodis to hemselven and festen dlicatly lordis and laides and riche men and suffer here pore brethren begge for meschef and fare ful harde.

Crist comaundith to yeve drynk to thrusty [thirsty] [men] and wymmen. The fiend and his techen to puveye high wyn and spised ale and strong for riche men and lordis to make hem drunken and chide and fighte and foryete God and his lawe, and to suffer pore, that han nought of hore owene and may not labore for febilnesse or sikenesse and blyndenesse drynke water and falle in feveris or ellis perische.

Crist comaundith to clothe nakyd men and wymmen whanne thei han noght of here owene. Thereto the fend and his techen to yeve costly clothis and manye to riche men and mynstralis and shavaldours {Northern slang for robbers] for worldly name and suffer pore men have nakid sidis and schakynge lippis and hondis for cold that woo is hemwith the lif. Ye, prelatis and men singular religion, that taken the charge to ben procuratouris and dispenderis of pore mennus liflode, clothen fatte horsis with gaie sadlies and bridles and mytris and croceris with gold and silver and precious stonys, and suffren pore men and children perische for cold. And yit these prelatis and newe religious comen in staat of Cristis povert and his apostlis, and techen and crien that whatever thei han is pore mennus goode. Yit riche men closen dede stockis and stonys with precious clothis, with gold and silver and perlis and gaynesse to the world, and suffren pore men goo sore acold and at moche meschefe.

Crist trechith to herberwe [harbour, accommodate] pore men that han non houses ne penby to peye for here innys [inns, lodging]. The fend and his techen to herberwe riche men and lordis with grete cost and deyitte for worldly worschipe and suffer pore men wander in stormys and slepe with the swyn and many tymes suffer not hem come withinne here yatis, and so to fynde many excusacions and coloure this doynge, Ye, ypocritis of privat religion maken grete houses and costy and gaily peyntid more than kyngis and lordis bi sotil beggynge and confessions and trentalise and mayntenynge of synne, and herberwe lordis and riche men, and namely ladies, and suffer more men lie withouten or geten houslewth at pore men or ellis perische for wedris and cold.

Crist techeth to visite sike men and counforte hem and helpe hem of sustenaunce. The fend and his techen to visiten riche me, lordis and ladies in here prosperite and lykynge to be holden kynde [high born] and curteis, and to comforte eche other in synne and to have lustis of glottonye, lecherie and other schrewidnessis; but of pore men that ben beddrede and couchen in muk or dust is litel thought on or noght. Yit ypocritis of feyned religion vistien not fadirles children and modirles [motherless] and widewise in here tribulacion, and kepe not hemself unbleckid fro this world as Seynt James techith; but visite off riche men and wymmen and namely riche widewis [widows] for to gete world muk by false deceitis and carien it home to Caymes’ {Cain’s] castelis and Anticristis covent [convents] and Sathanas children and marteris [martyrs] of glotonye.

Crist techith to visit men in prison and helpe to delyvere hem in good manere and counforte hem bi almes-yevinge. The fend and his prresonen pore men for dette whanne thi ben not at power to paie and traveil night and day and liven ful harde and toylen with trewthe and susteynen wif and children…

From Middle English Religious Prose, edited by N.F. Blake (London: Edward Arnold 1972) pp. 239-41.

Clearly, this is a piece of sectarian polemic, and isn’t entirely fair. Historians have pointed out that the church was suffering serious poverty and neglect the time, which affected many of the lower clergy and monastic institutions, so that they simply weren’t in any position to perform their Christian duties of aiding the poor themselves.

And my point here is not to attack the Roman Catholic church, as I know many ordinary Catholics and Roman Catholic clergy are deeply involved in caring for the poor. But simply to make the point that the issues the Lollards inveighed against are still present and embodied in the Tory party and people like Tweezer. In the Middle Ages, it was the church that had the function of providing whatever welfare services there were to the poor, as well as the personal charity of great lords. But since Thatcher, public institutions and the welfare state – the modern, secular equivalents of these religious institutions, have been run down for the profit of the rich.

And there’s also a distinct religious parallel here too, though it’s with the evangelical Christian Right and their prosperity gospel. Tweezer is a vicar’s daughter, who claims that when she was a child she was a ‘goody two-shoes’. Lobster has pointed out just how many right-wing Christians gathered around IDS and now Damian Greene in the DWP. The evangelical Right in America believe that God doesn’t want you to be poor, for whom they have nothing but contempt. One particularly self-righteous Republican politico – it might have been Ted Cruz – even declared that the poor should be taxed more. ‘Because it’s what Christ would have wanted’. No, and this moron should read the Gospels before opening his mouth.

And I’m still furious at the way a large number of right-wing pastors made it clear that they didn’t care if one Republican candidate was guilty of molesting underage girls. He stood for their values, which were for the rich, and against the poor. And, of course, gays. Which shows how selective their concern over changes and violation of traditional sexual morality is.

These hypocrites have done as much harm to Christianity as Dawkins and the militant atheists. Many of the atheist polemicists are socially conscious people, whose rejection of religion is partly based on the way the religious don’t live up to their ideals. And as history has shown, and these pratts continue to show, all too often the atheists have been right in this criticism.

And in there moral condemnation of the fawning over the rich at the expense of the poor, the Lollards were right. And this text from six hundred years ago shows up the Tory party and its hypocritical supporters in the Christian religious right as it is today.

Another Crisis in the Outsourcing Industry: Capita Now in Trouble

Yesterday, Mike reported on his blog that the outsourcing giant, Capita, was now in trouble. Its share price has apparently halved, knocking £1.1 billion of its stock market value. It has axed its scheme to issue £500 million in dividends to its shareholders. Instead, it intends to raise £700 million, partly by selling off parts of the company, which it needs to balance the books. There are also fears that it will make part of its 67,000 strong workforce redundant as well as concerns for the firm’s pension fund.

Mike in his article notes that the company was responsible for assessing the infamous fitness for work tests, for which the government has imposed hidden targets. One of these is that 80 per cent of reconsidered cases should be turned down. Mike therefore comments that if the crisis means that some of these assessors get a taste of what they inflicted on benefit claimants, this would be a case of poetic justice. He also wonders what the firm was doing when it devised the scheme to issue those massive dividends to its shareholders. Did they believe that the government’s magic money tree would continue to allow them to give heaps of money to their rich shareholders? He also asks other searching questions, such as whether it was deliberately underbidding to get government contracts, and then using the money to help finance those projects it had already won.

Mike concludes

So: First Carillion collapsed. Now both Interserve (remember them?) and Capita are in trouble.

Who’s next? And what will happen to public services while the Tories dither over this crisis?

See: https://voxpoliticalonline.com/2018/01/31/in-the-crap-ita-government-contractor-responsible-for-benefit-assessments-is-in-deep-financial-doo-doo/

Capita, or as Private Eye dubbed it, ‘Crapita’, has a long history of incompetence behind it. Way back in the 1990s it seemed that hardly a fortnight went by without Capita turning up in the pages of the satirical magazine. And the story was nearly always the same. The outsourcing company won a government or local authority contract to set up an IT system or run IT services. The project would then go over time and over budget, and would be massively flawed. And then a few weeks or months later, the company would be given a contract somewhere, and do exactly the same thing there.

You’re left wondering how Crapita kept winning those contracts, when it was so manifestly unfit to carry them out. Who did it have on its board? Or was there a deliberate policy by Major’s government to support outsourcing, no matter how inefficient and incompetent they were, because it was private enterprise and so preferred and supported for purely ideological reasons?

In any case, what seems to have placed the company in a very precarious financial situation is the usual tactics of big companies in this stage of capitalism: award massive dividends to the shareholders. This usually goes along with starving the rest of the company of investment, which seems to have been done to. And granting massive, and massively unsustainable pay awards to senior management. There’s no mention of that in Mike’s article, but I don’t doubt that this was done too. I’ve got the impression that it’s just about standard practice across a huge swathe of industry.

This is a financial strategy that has driven far more than one company to the wall. I also wonder if the executives weren’t also trying deliberately to create a debt, so that they could dodge corporation tax for five years. This is one of the tricks Stewart Lansley and Joanna Mack describe in their book on contemporary British poverty, Breadline Britain.

Over the years the outsourcing policy has been in operation, there’s been one crisis after another. The outsourcing companies have repeatedly shown themselves to be incompetent, not just in the case of capita, but also notoriously with G4S and the scandals over the violence and brutality it meted out towards asylum seekers in the detention centres it ran. And, of course, when a whole load of prisoners escaped on their way to court. Or jail.

Private industry has repeatedly shown that it is incompetent to do the work of the state sector. These firms have the disadvantage of having to make a profit for their shareholders, as well as the demands of their management for multi-million pound pay packets. The only way they can afford this is by cutting wages to their workers, and spending as little as possible on the service they are meant to be providing. The result of this has been a series of financial collapses. Carillion was the first. Now Capita and Interserve, another outsourcing company, is in similar trouble.

The only sensible recourse should be to cancel these companies’ contracts, and take everything back in-house. But this won’t be done. I think there’s a problem in that the state sector has been so decimated by the past four decades of Thatcherism, that it no longer has the capacity to run these services itself. There’s also the additional problem that too many politicians and media magnates have connections to these companies, or to firms in a similar position hoping for government contracts. Acknowledging that outsourcing was a failure would damage the interests of these politicos and press barons. There’s also the challenge of actually facing up to the fact that a central plank of Thatcherite dogma – that private enterprise is always more efficient than the state – is absolutely, undeniably wrong. Anybody who makes this point is denounced as a Communist in screaming headlines. You only have to look at the way the Tory press has vilified Jeremy Corbyn for daring to want to renationalise the NHS, the electricity net and the railways. His policies are very far from the total nationalisation demanded by Communists and Trotskyites, but you wouldn’t know it from the frothing abuse hurled in his direction by the Tories and Blairites.

There’s also another problem with calling an end to the outsourcing scam. PFI contracts and outsourcing allow some of the costs to be written off the official government accounts sheet. They’re still there, and we have to keep paying them, but they’re not included in the official figures. It’s why Mussolini used a similar scam when he was Duce of Fascist Italy. Any government that restores these projects to the way they were handled before risks putting millions back the official figures. And if that’s the Labour party, you can imagine the Tories making their usual hackneyed and untrue comments about ‘high-spending Labour’, and then re-iterating the spurious arguments for austerity.

I’ve no doubt that the government will do what it can to shore up the current mess the outsourcing companies are in. But the collapse of Carillion and now the severe financial troubles faced by Capita and Interserve show that outsourcing does not work. And given these companies’ highly checkered history, they should never have been given governments to begin with.

And it bears out exactly the description the author of Zombie Economics used for them in the very title of his book. Outsourcing, and the rest of the Thatcherite economic strategy of privatisation, wage restraint, low taxation and declining welfare are ‘zombie economics’ as they don’t work, but haven’t yet been put it into the grave.

It’s high time they were, and Thatcherite free trade capitalism was abandoned as the failure it so glaringly is.

Merkel Claims May Begs Her to ‘Make Me an Offer’

Remember when the Tories were trying to convince everyone that Tweezer was ‘strong and stable’, and could be trusted to get us a good deal on Brexit? Oh, how times have changed!

Mike put up a story yesterday, reporting that the German Chancellor has been making jokes at our PM’s expense about her negotiating style. According to die Kanzlerin, all the negotiations between her and May go round in circles, with both of them saying exactly the same things. May will say, ‘Make me an offer.’ Merkel will reply, ‘We don’t have to. You’re leaving.’ At which point May will repeat her first request. Merkel then repeats her reply, and the conversation goes on, round and round in circles.

See Mike’s article at: https://voxpoliticalonline.com/2018/01/30/brexit-make-me-an-offer-says-may-but-nobody-wants-to-talk-with-her/

Now before we go any further, it needs to be said that domestically Merkel is in a precarious position. She’s hung on to power, but her decision to welcome the wave of Middle Eastern refugees from Syria and North Africa a few years ago has damaged her popularity, and boosted that of the Nazi AfD. I also gather that there are problems about whether or not the SPD will join her grosse Koalition. They joined a coalition with her before, only to find their share of the vote declining as Merkel’s Conservative Christian Democrats took the credit for genuine improvements in the benefits system, which had actually been done by the SPD. The pressure’s on Merkelt to make herself look strong for the voters in Germany.

But this actually shows how weak May is. If this is right, then it shows how May actually doesn’t have anything to negotiate with. As we’re leaving the EU, they don’t actually have to make any concessions to us whatsoever. But the country needs them to, as does May personally. And so her remark to Merkel, ‘Make me an offer’, sounds less like an invitation by a skilled business negotiator in a Hollywood drama to productive talks than begging by a desperate and embattled PM. It also seems to show that May can’t talk, except in clichés she’s learned from the movies. Or had programmed into her by her handlers at Tory Central Office. But the cliché, coming as it does from Hollywood, is there to convince someone that actually she’s a tough negotiator. Perhaps she’s trying to persuade Merkel that she’s going to be able to make an offer Merkel can’t refuse. In which case, she and the Tory hordes behind her are very, very sadly deluded.

May needs an offer, any offer, even if it’s one she has no option but to reject, in order to show the Tory faithful and the voting public that she is able to negotiate any kind of settlement at all. And Merkel is determined to show her the opposite: that she’s in absolutely no position to demand anything.

Thus the Brexiteers, far from leading Britain back into a resurgence of pride and sovereignty, as people like Jacob Rees-Mogg would have us all believe, have actually done the opposite. Repeated studies have shown that Brexit will damage our economy, and the process has left the Prime Minister suppliant and begging before Merkel and the other leaders of the EU.

So much for ‘strong and stable’.

Not that Young Master Rees-Mogg is upset. Mogg makes his money, or a fair part of it, from investments, and so hopes that by going outside the EU and turning Britain into a low tax, low regulated economy just outside the EU, they can make Britain into a colossal tax haven for the global financial industry. No matter that the rest of the British economy, such as manufacturing, and its working people, have already suffered because of the Thatcherite promotion of the financial sector. Mogg’s a true blue, Tory aristocrat, who has consistently voted to give him and his class generous financial rewards, while cutting welfare for the poor, the disabled and working class. This shows his priorities, and those of the Hard Brexiteers that stand behind him. Whatever deal he wants to negotiate will very definitely not benefit anyone, who isn’t a millionaire investment banker.

Nationalisation Is Better: Bail-Out of South East Trains Shows Privatisation Doesn’t Work

Published by Anonymous (not verified) on Wed, 17/01/2018 - 9:48pm in

South East Trains was in trouble again last week, and had to be bailed out by the government. The Labour Party made a statement that this showed the precarious state of the entire privatised rail network, as many of the other train companies could also claim they are in serious financial trouble, and pull out of the contracts.

This isn’t the first time aa privatised rail company has had to be bailed out by the government, or an alternative company found after one of them collapsed. And it shows very clearly that private railways don’t work.

Remember the old arguments for privatisation? State industries didn’t work. Instead, the state was subsidising inefficiency and these companies were a burden to taxpayers. They should be privatised, which would then make them more efficient, because they would have to respond to Maggie’s sacred ‘market forces’. If they couldn’t compete, they should be allowed to collapse. As happened with the mining industry.

Except that it hasn’t worked like that. We are now paying more in subsidies to the rail companies than we did when they were nationalised as British rail. And the service is actually worse than in the last days of the beleaguered nationalised rail network, when it was operating under the Operating For Quality programme.

Privatisation doesn’t work. Nationalisation of essential utilities, like railways, does.

But you won’t find this view promoted in the press, because the billionaires and magnates in charge of it consistently promote the idea that private industry is better, even when it is absolutely obvious that it isn’t. This is because, as businessmen, they see the rail network in terms of its money value to them. The corporate capitalism created by Maggie Thatcher and the Tories means that taxpayers are always bailing out inefficient and failing private firms, while punishing the poor, the unemployed and the disabled. It’s all about giving more money to the rich, regardless of whether the services they provide is any good. Capitalism has to be supported and promoted regardless. And if anyone says anything, then the Tories automatically rant on about the inefficiencies of the state sector in the 1970s, and how wonderful it was when Thatcher sold everything off.

But the failure of South East Trains, and the parlous state the other rail companies are in, show that this argument doesn’t work. It’s time to call end to the private ownership of the railways. They need to be renationalised, and a proper, public service given to the people of the Britain.

Us and Them

Published by Anonymous (not verified) on Fri, 29/12/2017 - 6:14pm in

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Budget, Economics, tax

If you’re a government propagandist, the silly season always provides a happy hunting ground. Newsrooms are thinly staffed and there’s little beyond the holiday road toll and bushfires to fill the bulletin until the sports Read more…

Sam Seder on Disney’s Animatronic Donald Trump

Well, as Freddie Mercury once sang in Queen’s epic track, ‘Machines’, ‘The machines take over’, and this time there really ‘ain’t no rock ‘n’ roll’. Or as the blurb for this video puts it instead, the Trump animatronic is so horrifying it’ll haunt your dreams.

Disney have created a robot version of America’s most unpopular fascistic president for their Hall of Presidents. The Trumpdroid stands in front of the other animatronic US presidents, and recites a speech, with appropriate gestures and body movements, about his august predecessors were responsible for crafting the American constitution and political structure, and so creating the freedom that Americans enjoy today.

And Seder and his co-hosts are right: it is very creepy. The robotics technology used to animate the machine is really impressive, but it does bear out the observation of one Japanese robotics scientist. I forgotten the fellow’s name, unfortunately, but he shrewdly observed that people are uncomfortable with things that resemble them closely, but are still very different. Hence the human discomfort with robots when they become a little too accurate. Something similar was also said by Red Dwarf’s Kryten way back in the 1990s. Lister, or one of the other members of the ship’s highly dysfunctional crew, ask him why his manufacturers have made him look very much less than a perfect replica of a human. He replies by stating that it’s because this would make people feel uncomfortable around him, for exactly the same reasons the Japanese scientist suggested. And way back in the mid-1970s, an irrational fear of robots – ‘robophobia’, or ‘Grimwade’s Syndrome’, was one of the plot elements in the Tom Baker Dr. Who serial ‘The Robots of Death’. This particular serial was set on a sandminer, a vast mining vehicle, operated by a small human crew under which was a much larger labour force of robots. And the robots start shaking off their servitude. It’s explained in the show that some people have an irrational fear of robots, because although they look like humans, they don’t employ any body language. And so to them they appear as ‘the walking dead’.

Rather more humorously, Seder and his friends joke that the other mechanical presidents are looking at the Trumpdroid wondering how on Earth it got there. And that the President Lincoln android is just about to tell the rest of them that there’s no choice for it now: they have to put the pistols to their heads and blow their little robot brains out. They also joke that it’s rather like the bit on the SF series Westworld, when the robots look down at themselves and finally realise what they are.

Rather more seriously, the clip begins with a discussion between Seder and a caller about the GOP’s tax bill, and why people join the Republican party. He states some join, because they hate the Environmental Protection Agency, and what to use highly toxic pesticides on their land, like Tom Delaye. Others really hate trade unions, and what to destroy them to keep ordinary people poor. But the majority do it to enrich themselves through corporate sponsorship. Such is the state of American politics. And the same comments also apply to the corporate Dems of Hillary Clinton, and to the Conservatives and Blairite Labour over this side of the Pond.

If these characters remain in power, perhaps the world would be much better if the machines really took over. Or the Xenomorphs from the Alien franchise. After all, as Ripley says in the 2nd film, Aliens, when she discovers the way she and the space marines have been betrayed by the Corporation, the aliens ‘don’t f**k each other over for a percentage’.

MYEFO. Nowhere near enough to fund tax cuts

Published by Anonymous (not verified) on Mon, 18/12/2017 - 9:50am in

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Comment, tax

Scott Morrison wants you believe the budget's strong enough to fund tax cuts.

It isn't, and the update makes that clear.

As it is required to do, it spells out the stated aim of the budget - what the Coalition has pledged to achieve since its election - on page 31.

The aim is to "deliver sustainable budget surpluses, building to at least 1 per cent of GDP, as soon as possible, consistent with the medium-term fiscal strategy".

That's a surplus of 1 per cent of gross domestic product, as soon as possible, consistent with quality spending and economic growth.

After a boost to the budget of about $10 billion over four years, what has it been left with?

A budget surplus of just one half of one per cent of GDP by the end of the four year projection period.

It's an improvement. The May budget pencilled in 0.4 per cent. But it's nothing like the 1 per cent of GDP the Coalition itself adopted as a target to be reached "as soon as possible". And beyond those four years the graph in the update shows the surplus staying put at half a per cent of GDP right out to 2027.

Weakening that budget position by giving some of it away, as the Prime Minister and Treasurer are hinting they will in next May's budget, would be a further abrogation of a pledge the Coalition hasn't come near fulfilling ever since it made it in 2014.

Improving the budget, certainly improving it by the billions that would be needed to fund reasonable tax cuts, is hard. Almost all of the $10 billion improvement this time came came from (generally mining-related) higher company profits and superannuation earnings, as well as lower than expected payments to Australians who are out of work. Government actions improved the outlook by about half a billion. It won't be enough.

In The Age and Sydney Morning Herald

 

Fresh push for company tax cuts as economy lifts budget $10 billion

Treasurer Scott Morrison has signalled a fresh push to get the government's $50 billion package of company tax cuts through the Senate, saying that US President Trump is forcing his hand and that the changing composition of the Senate gives him a chance.

Higher than expected company tax receipts helped improve the budget position by $10 billion in the update released on Monday, improving the outlook for 2017-18 by $5.8 billion.

"The Trump tax cuts are coming," Mr Morrison told a Parliament House press conference. Allowing Australian rates to stay high while others fell would kill the goose that laid "the golden egg".

Australia's Senate has passed only $24 billion of the government's $50 billion package of company tax cuts, cutting the 30 per cent rate for small businesses but not for big ones. President Trump is within days of cutting the US rate to 21 per cent.

"When you have the United Kingdom going down to 17 per cent and many jurisdictions, even France now going to 25 per cent, we can't leave Australian workers behind," Finance Minister Mathias Cormann told the press conference.

"The future of job security and the future career prospects and wages growth of Australian workers depend on the Senate passing the government's company tax cut."

The government needs the support of 10 crossbench senators. Resignations and disqualifications since the July 2016 election mean that next year six of them will be new.

Senator Cormann said the $10 billion boost was so big that after this financial year the government would no longer need to borrow to fund day-to-day business.

"That's a year earlier than anticipated at the time of the budget," he said. It would be the first time since the global financial crisis.

The fastest jobs growth in decades meant less was being paid out in Newstart and other benefits. Measures taken in the Coalition's first budget to slow the growth in welfare payments were bearing fruit.

Key measures in the budget update include longer waiting times before newly arrived migrants can access payments, including paid parental leave and family tax benefits.

From July 2018, the two-year waiting period for these payments will be extended to three, though some exemptions will apply for vulnerable groups and New Zealand citizens living in Australia. The measures will save $1.2 billion.

Savings from the university sector of $2.8 billion have been dumped after being blocked by the Senate. Instead, a series of measures including a freeze on Commonwealth payments to universities will deliver a net saving of $2.1 billion.

And $400 million will be saved over four years by withholding family tax benefit lump sums from people who have outstanding social security debts.

In what Victoria's treasurer Tim Pallas is describing as a slight, the update cuts Victoria's share of infrastructure funding from 10.3 per cent to 9.4 per cent. Victoria has 26 per cent of Australia's population, and 37 per cent of Australia's population growth. The NSW's share has climbed from 44.6 per cent to a mammoth 45.5 per cent. 

"The Prime Minister of Sydney has struck again," Mr Pallas said. "He continues to shortchange Victorians, while sending more money to his home state of NSW."

The update forecasts wage growth of just 2.25 per cent this year, down from the 2.5 per cent predicted in May. It forecasts 2.75 per cent in 2018-19, down from 3 per cent.

Offsetting this, the government is expecting better than previously forecast employment growth, with the unemployment rate expected to be 5.5 per cent by June 2018, followed by near full employment of 5.25 per cent in mid 2019.

The economic growth forecast has been shaved by a quarter of a per cent, down from 2.75 to 2.5 per cent. Consumer spending is forecast to grow by 2.5 per cent rather than 2.75 per cent.

"We had much lower-than-expected consumption growth in the September quarter, just 0.1 per cent, said Mr Morrison. "There was, rightly, a lot of concern about what was happening with household living costs. That's why the National Energy Guarantee and other measures have been put in place. We would hope to see  better consumption figures going forward."

Even so, the growth was forecast to climb to 3 per cent in 2018-19 on the back of a lift in private and public sector investment, both of which hade been revised higher.

Shadow treasurer Chris Bowen said he was happy to debate taxes with Mr Morrison because his priorities were "all wrong." 

"The reason the budget is still such a mess is because Malcolm Turnbull and Scott Morrison continued to shower the biggest tax concessions on the people in our community, the millionaires and multinationals, who need tax breaks least, as well as jacking up taxes on people who work in middle Australia," he said. 

In The Age and Sydney Morning HeraldPeter Martin is economics correspondent for The Age and the Sydney Morning Herald.

He blogs at petermartin.com.au and tweets at @1petermartin.

American Tsarism

Going though YouTube the other day, I found a clip, whose title quoted a political analyst, radical or politicians, as saying that the American political elite now regards its own, ordinary citizens as a foreign country. I’m afraid I’ve forgotten who the speaker was, but I will have to check the video out. But looking at the title of what the leader of the Conservative branch of the Polish nationalist movement said about the Russian Empire. He described how the tsars and the autocracy exploited and oppressed ordinary Russians, stating baldly that ‘they treat their people as a foreign, conquered nation’. Which just about describes tsarist rule, with its secret police, anti-union, anti-socialist legislation, the way it ground the peasants and the nascent working class into the ground for the benefit of big business and the country’s industrialisation. The system of internal passports, which were introduced to keep the peasants on the land, and paying compensation to their masters for the freedom they had gained under Tsar Alexander, and to continue working for them for free, doing feudal labour service: the robot, as it was known in Czech. It’s no accident that this is the word, meaning ‘serf’ or ‘slave’, that Karel Capek introduced into the English and other languages as the term for an artificial human in his play Rossum’s Universal Robots.

We’re back to Disraeli’s ‘two nations’ – the rich, and everyone else, who don’t live near each other, don’t have anything in common and who may as well be foreign countries. It’s in the Tory intellectual’s Coningsby, I understand. Disraeli didn’t really have an answer to the problem, except to preach class reconciliation and argue that the two could cooperate in building an empire. Well, imperialism’s technically out of favour, except for right-wing pundits like Niall Ferguson, so it has to be cloaked in terms of ‘humanitarian aid’. Alexander the Great was doing the same thing 2,500 years ago. When he imposed tribute on the conquered nations, like the Egyptians and Persians, it wasn’t called ‘tribute’. It was called ‘contributions to the army of liberation’. Because he’d liberated them from their tyrannical overlords, y’see. The Mongols did the same. Before taking a town or territory, they’d send out propaganda, posing as a force of liberators come to save the populace from the tyrants and despots, who were ruling them.

What a joke. Someone asked Genghis Khan what he though ‘happiness’ was. He’s supposed to have replied that it was massacring the enemy, plundering his property, burning his land, and outraging his women. If you’ve ever seen the 1980s film version of Conan the Barbarian, it’s the speech given by Conan when he’s shown in a cage growing up. I think the film was written by John Milius, who was responsible for Dirty Harry ‘and other acts of testosterone’ as Starburst put it.

And it also describes exactly how the elite here regard our working and lower-middle classes. We’re crushed with taxes, more of us are working in jobs that don’t pay, or forced into something close to serfdom through massive debt and workfare contracts. The last oblige people to give their labour free to immensely profitable firms like Tesco’s and Sainsbury’s. And at the same time, the elite have been active in social cleansing – pricing the traditional inhabitants of working class, and often multicultural areas, out of their homes. These are now gentrified, and become the exclusive enclaves of the rich. Homes that should have people in them are bought up by foreigners as an investment and left empty in ‘land-banking’. And you remember the scandal of the ‘poor doors’ in London, right? This was when an apartment block was designed with two doors, one of the rich, and one for us hoi polloi, so the rich didn’t have to mix with horned handed sons and daughters of toil.

I got the impression that for all his Toryism, Disraeli was a genuine reformer. He did extend the vote to the upper working class – the aristocracy of Labour, as it was described by Marx, creating the ‘villa Toryism’ that was to continue into the Twentieth Century and our own. But all the Tories have done since is mouth platitudes and banalities about how ‘one nation’ they are. Ever since John Major. David Cameron, a true-blue blooded toff, who was invited by the Palace to take a job there, claimed to be a ‘one nation Tory’. Yup, this was when he was introducing all the vile, wretched reforms that have reduced this country’s great, proud people, Black, brown, White and all shades in-between – to grinding poverty, with a fury specially reserved for the unemployed, the sick, the disabled. These last have been killed by his welfare reforms. Look at the posts I’ve put up about it, reblogging material from Stilloaks, Another Angry Voice, the Poor Side of Life, Diary of a Food Bank Helper, Johnny Void, et al.

But that’s how the super-rich seem to see us: as moochers, taxing them to indulge ourselves. It was Ayn Rand’s attitude, shown in Atlas Shrugs. And it’s how the upper classes see us, especially the Libertarians infecting the Republican and Conservative parties, whose eyes were aglow with the joys of the unrestrained free market and the delights of South American death squads and the monsters that governed them. Walking atrocities against the human condition like General Pinochet, the Contras, Noriega. All the thugs, monsters and torturers, who raped and butchered their people, while Reagan slavered over them as ‘the moral equivalent of our Founding Fathers’. And you know what? An increasing number of progressives are taking a hard look at the Fathers of the American nation. Patricians to a man, who definitely had no intention of the freeing the slaves, or giving the vote to the ladies. and who explicitly wrote that they were concerned to protect property from the indigent masses. Outright imperialists, who took land from Mexico, and explicitly wrote that they looked forward to the whole of South America falling into the hands of ‘our people’. If you need a reason why many South Americans hate America with a passion, start with that one. It’s the reason behind the creation of ‘Arielismo’. This is the literary and political movement, which started in Argentina in the 19th century, which uses the figure of Caliban in Shakespeare’s the Tempest to criticise and attack European and North American colonialism, with the peoples of the South as the Caliban-esque colonised. It was formed by Argentinian literary intellectuals as a reaction to America’s wars against Mexico and annexation of Mexican territory, and their attempts to conquer Cuba during the Spanish-American War.

That’s how South America responded to colonisation from the North and West. And colonialism – as troublesome ‘natives’ to be kept under control, is very much how the elite see ordinary Brits and Americans, regardless of whether they’re White, Black, Asian or members of the First Nations.

But you can only fool people for so long, before the truth becomes blindingly obvious. You can only print so many lies, broadcast so many news reports telling lies and twisted half-truths, before conditions become so terrible ordinary people start questioning what a corrupt, mendacious media are telling them. The constant scare stories about Muslims, foreign immigration, Black crime and violence; the demonization of the poor and people on benefit. The constant claim that if working people are poor, it’s because they’re ‘feckless’ to use Gordon Brown’s phrase. Because they don’t work hard enough, have too many children, or spend all their money on luxuries like computers – actually in the information age a necessity – or computer games, X-Boxes and the like.

You can only do that before the workers you’ve legislated against joining unions start setting up workers’ and peasants’ councils – soviets. Before the peasants rise up and start burning down all those manor houses, whose denizens we are expected to follow lovingly in shows like Downton Abbey. Which was written by Julian Fellowes, a Tory speechwriter.

Before ordinary people say, in the words of ’80s Heavy Metal band Twisted Sister, ‘We ain’t goin’ to take it’.

Before decent, respectable middle class people of conscience and integrity decide that the establish is irremediably corrupt, and there’s absolutely no point defending it any longer.

A month or so ago, BBC 4 broadcast a great series on Russian history, Empire of the Tsars, present by Lucy Worsley. In the third and last edition, she described the events leading up to the Russian Revolution. She described how Vera Zasulich, one of the 19th century revolutionaries, tried to blow away the governor of St. Petersburg. She was caught and tried. And the jury acquitted her. Not because they didn’t believe she hadn’t tried to murder the governor of St. Petersburg, but because in their view it wasn’t a crime. Zasulich was one of the early Russian Marxists, who turned from peasant anarchism to the new, industrial working classes identified by Marx as the agents of radical social and economic change.

And so before the Revolution finally broke out, the social contract between ruler and ruled, tsarist autocracy and parts of the middle class, had broken down.

I’m not preaching revolution. It tends to lead to nothing but senseless bloodshed and the rise of tyrannies that can be even worse than the regimes they overthrow. Like Stalin, who was as brutal as any of the tsars, and in many cases much more so. But the elites are preparing for civil unrest in the next couple of decades. Policing in America is due to become more militarised, and you can see the same attitude here. After all, Boris Johnson had to have his three water cannons, which are actually illegal in Britain and so a colossal waste of public money.

Don’t let Britain get to that point. Vote Corbyn, and kick May and her gang of profiteers, aristos and exploiters out. Before they kill any more people.

Facebook Announce Intention To Evade Tax Some Other Way

Published by Anonymous (not verified) on Wed, 13/12/2017 - 10:27pm in

WITH Facebook’s decision to no longer use Ireland as its revenue and tax hub, the tech giant is believed to now be actively searching for an alternative way to evade tax. Despite the Irish government’s best efforts to create new tax loopholes, Facebook confirmed they would route sales of ads through their countries of origin.... Read more »

Now they can afford a tax cut?

Published by Anonymous (not verified) on Thu, 07/12/2017 - 7:34pm in

Tags 

Budget, column, tax

So now they can afford a tax cut?

Just months ago, in the May budget, Scott Morrison and Malcolm Turnbull pushed tax rates up. That's right, up. They lifted the Medicare levy from 2 to 2.5 per cent, beginning in 2019. It'll net them $4 billion a year, money they said they needed to fund the National Disability Insurance Scheme.

And now they can afford a cut?

Maybe they didn't really need the extra money for the National Disability Insurance Scheme after all. And there's an extremely flimsy argument that they didn't.

The mid-year budget update, due within the fortnight, is likely to show the budget is slightly better off. Unexpectedly strong company tax revenue in the first four months of the financial year has put the budget almost $5 billion ahead of target.

Much of it flows from a better than expected run up in commodity prices, which we now know didn't last. But that wouldn't stop an optimistic forecaster or an optimistic government from acting as if it would last and handing out permanent tax cuts of up to $5 billion per year.

The most successful private sector budget forecaster is Deloitte Access Economics, whose senior staff used to prepare the official forecasts when they were in Treasury.

Deloitte says that by the end of the financial year, revenue will be only $2.7 billion ahead of the budget and only $0.9 billion ahead in the following year. It produced a ready reckoner to enable us to calculate what kind of a tax cut those boosts could buy if it was permanent, which it almost certainly will not be.

Three billion could buy a lift in the $18,200 threshold to $19,200 and a lift in the $37,000 threshold to $38,000. That's all.

One billion, a more realistic, though still inflated, guess as to how much extra the government might have long term, couldn't even buy the lift from $37,000 to $38,000. Deloitte director Chris Richardson says it would buy a small sandwich or a small milkshake.

Unless the proposed tax cut applied to hardly anyone, which is a trick they've pulled repeatedly. Lifting the $87,000 threshold by $1000 costs only $110 million per year; lifting the $180,000 threshold costs only $30 million.

It's something to keep in mind if we once again get tax cuts skewed towards the top. It mightn't be so much a case of the Coalition helping out high income mates as making a gesture it can afford.

Middle earners are about to get clobbered. The government's own figures, spelt out by the Parliamentary Budget Office, show the average tax rate faced by middle-income Australians on $40,000 to $50,000 is about to climb 3 percentage points. Within four years.

Instead of handing over 14.9 per cent of their income after low starting rates and the tax-free threshold, middle earners will find themselves handing over 18.1 per cent. Within four years. It's the result of bracket creep, and the increase in the Medicare levy. And the projected return to surplus in 2020-21 depends on it.

The only ways to deliver serious tax relief are to push out further the projected return to surplus (just as it has been pushed out repeatedly by treasurers dating back to Wayne Swan), to fund the needed tax cuts with big spending cuts (something this government and the last have been incapable of, even in non-election years), or to fund the tax cuts by lifting other taxes.

Or by hoping something comes along.

And there's the magic pudding.

Here's how Finance Minister Mathias Cormann put it in a speech to the Business Council last month:

"Something that we keep pointing out again and again, but which doesn't ever seem to be appropriately well understood by analysts or commentators, is that our budget revenue forecasts are based on an assumption imposed on our forecasting model that tax revenue as a share of GDP is not allowed to exceed 23.9 per cent."

"Future tax cuts are already reflected in our revenue forecasting methodology."

He is right. Already baked into the budget projections are tax cuts from 2022-23 when the tax share of GDP is due to hit 23.9 per cent, which is the average take in the years between the introduction of the GST and the global financial crisis.

Five years into the future though those baked in tax cuts will be, they could be delivered as income tax cuts. Except that they mostly won't be, not if the government gets its full company tax cut through the Senate.

The Parliamentary Budget Office says if that happens, the company tax cut will do most of the heavy lifting needed to keep the tax to GDP ratio at 23.9 per cent, leaving little room for cuts in personal income tax, which will "continue to rise as a per cent of GDP".

There's not likely to be a magic pudding, unless the government prioritises personal tax cuts over company tax cuts or gets hit by another mining boom.

Treat sceptically proffered income tax cuts in the months beyond Christmas. They'll be either unaffordable or alarmingly small.

 

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In The Age and Sydney Morning HeraldPeter Martin is economics correspondent for The Age and the Sydney Morning Herald.

He blogs at petermartin.com.au and tweets at @1petermartin.

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