How the rich divide and rule the poor

Members and supporters of Welfare Rights Committee stand in front of banner after April 15 "tax the rich" protest in the rotunda

I began writing this as a reply to a worker infected by the ideological disease that could be called today’s version of “the socialism of fools”.

That was the name given by German socialists at the end of the 19th century to the irrational, bigoted and eventually genocidal idea that Jews were to blame for the plight of oppressed and exploited workers.

Today’s “fools” in Australia blame asylum-seekers and refugees, especially those of Muslim faith or who come from the Middle East.

Meanwhile, an Australian Labor government is planning to cut company tax rates again at a cost of $3.5 billion to the public purse over the next three years.

* * *

Right-wing politicians (including from the ALP) have systematically sown division among ordinary people in Australia.

They have done this to workers, making workplace solidarity pretty close to illegal and they have worked to break down our innate sense of solidarity for the millions of people suffering oppression and war.

They are promoting an irrational fear of the tiny proportion of the millions of desperate asylum seekers who are fleeing war and persecution who make it to our shores.

They do this to distract us from the real crimes that they are perpetuating in making the richer minority in our society even richer, by holding down wages and working conditions, and by giving the rich billions of dollars annually in corporate subsidies and tax cuts.

Over the past three and a half decades, Labor and Liberal governments have colluded in a $2.2 trillion transfer of income from the working class to the corporate rich.

Corporate profit share of total income in Australia has increased from 16.9% to 27.7% since 1974-75, while wage share has decreased from 62.7% to 54%. In today’s dollars, that is $2.2 trillion shifted to corporate profits.

The 11 Australians who made the Forbes rich list for 2010 have a total net wealth of $25.7 billion — more than the net wealth of the country’s 800,000 poorest households.



But the greed of the super-rich knows no bounds. Look at the US, where the super-rich received a trillion dollars in tax cuts in the previous budget (yes, even under the Obama Administration) while the US government racked up its accumulated debt to US$14.3 trillion.

In that country, the richest 1% take a quarter of all income.

Over the past three decades, the tax rate on the richest individuals and on companies in Australia has been reduced yet the super-rich are demanding (and the Gillard government is promising) another cut to the corporate tax rate, from 30% to 29%.

Treasury estimates obtained by Greens MP Adam Bandt say this will take an estimated $3.5 billion from the budget over the three years to 2015.

If the tax rate cut was given to only small businesses (companies with a turnover of less than $2 million a year) the cost to budget would be just $400 million over the same period.

This exposes the big parties’ pretence that they want to help out small business.

The current corporate tax rate is supposed to be 30%, but the biggest companies pay accountants and lawyers to avoid and reduce their taxes.

BHP Billiton and Rio Tinto pay just 13%, but most workers pay 30% or more.

Between 2005 and 2008, more than 40% of big businesses paid no income tax.
We saw the political power of the big mining companies when the former Rudd government threatened to bring in a mining super-profit tax.

Rudd was deposed and the Gillard government quickly did a $60 billion tax giveback deal with the big mining companies.

Just 10 years ago nearly 40% of mining profits came back to the public in royalties and taxes. Now it has been reduced to less than 14%, while total mining profits have multiplied by more than 10 times.

It is the biggest corporate rip-off in Australian history.

Considering this wholesale robbery of our society by the corporate super-rich, it is understandable that the politicians they have bought off are working hard to distract the working class people by turning them against asylum seekers and Muslims. It is the old divide and rule strategy.

So the politicians are doing exactly what we would expect. But we, the ordinary people, do not have to fall for their dirty, divisive tricks. We don’t have to become their dupes.

With the unity and solidarity of the oppressed in this country and around the world we can liberate society from the dictatorship of corporate greed and break down all their repressive institutions, including those propped up with the bigotry and backwardness of religious dogmas.

Become a Green Left supporter today and get the first month free!

Green Left aims to make all content available online, without paywalls. We rely on regular support and donations from readers like you.