Ten reasons why Tony Abbott is wrong about poverty



Employment minister Tony Abbott is notorious for describing the unemployed as "job snobs". On July 9, he went further, blaming the poor for their own plight. He told the ABC Four Corners program: "We can't abolish poverty because poverty in part is a function of individual behaviour. We can't stop people drinking. We can't stop people gambling. We can't stop people having substance problems."

Here are 10 reasons why Abbott is wrong.

1. The rich also gamble — but then they can afford to! Kerry Packer famously blew $17 million at a Las Vegas casino in one sitting. But that would have stung him about the same amount as the average Green Left reader losing $20. More importantly, unlike the poor, the rich have access to that other casino called the stock market. The overwhelming majority of transactions on the stock market are "speculative investments". This is just another name for gambling.

2. The rich also drink and take drugs — but only they can afford fantastically expensive French Champagne. A poor drinker, on the other hand, might struggle to buy a four-litre cask of Stanley claret. The rich are big consumers of illicit drugs, but then cocaine-sniffing millionaires always manage to be far more discreet about it than the stereotypical Kings-Cross heroin addict.

3. Unemployment. Of course, many of the rich are unemployed. (i.e., don't work). This proves that unemployment does not, in and of itself, cause poverty. The reason the unemployed (idle) rich don't become poor is because they live of the work done by other people, working-class people — those who have to live by having a rich person or an association of rich people (a corporation) exploit their ability to work. But unemployed working-class people are necessarily poor, having to live off the miserly unemployment benefit provided by the government.

4. Low wages. In Australia, outworkers (garment workers who work from home) may earn as little as $2 per hour. Meanwhile Tony Abbott, the cabinet minister, is entitled to $155,250 per year. For an outworker to earn what Abbott makes s/he would have to work for 77,625 hours per year. But there are only 8760 hours in a year. Now that's overtime! Low wages are a major factor in poverty and a much underrated one. In Australia and in other developed capitalist countries, the proportion of people who fall into the category "working poor" is steadily growing.

5. Unequal distribution of money. The poor are poor because the rich have (nearly) all the money. Capitalism is a system where for every winner there are always more losers. But not only that, the winners win at the expense of the losers. It's like the board game Monopoly. When a player lands on Mayfair (with a hotel on it) one player gains $2000 and the other player loses $2000 as well. Capitalism is just like this in that the rich get rich and stay rich at the expense of the poor. When an outworker in Australia is earning $2 per hour or a sweatshop worker in Indonesia is earning $2 a day, there is always a big capitalist corporation like Nike making massive profits. There are always rich shareholders who own a lot of shares.

6. The poor don't have access to investment capital. There's no use going to the stock exchange with $200 and expecting to make a large amount of money in two years. The standard brokerage fee for a single share transaction is around $70, so even to break

even the return on your shares would have to be 35%. To do significantly better than break even you would have to make a very high risk or speculative investment, but you would be gambling. You might as well go to the races. But with $2 million to "invest", it's a different ball game — such a sum will open doors to special share portfolios and hedge funds most people can't reach. (Alternatively, with $2 million, you could buy a small factory.) A $2 million investment with only a 15% return, modest for such a large sum if you include dividends, pays $300,000 per year. The difference between $200 and $2 million is that $2 million can be turned into investment capital — money that "makes" more money (by exploiting the labour of others).

7. The poor don't get to inherit wealth. One of the ways that wealth stays in the hands of the rich is inheritance. This is an important factor in the perpetuation of the capitalist system. Unlike Monopoly where everyone starts out with $1,500, in real life some are born the heir to billions and some are born with nothing. The tale of the self-made multi-millionaire is promoted precisely to hide the fact that the vast majority of multi-millionaires have inherited their riches.

8. The legal system. The poor are more likely to suffer from general property crime or be swindled by unscrupulous operators. The rich can afford to buy expensive lawyers to protect their interests. A rich person will enter the court usually with a high degree of prestige and respect. This will often unfairly influence sentencing. Politicians convicted of travel rorts get off scot-free while the courts jail desperate single parents for claiming too much welfare.

9. The education system. Rich children generally go to exclusive private schools with more resources which focus on preparing them for better universities. In contrast working-class children mostly go to under-funded and under-resourced state schools where they are taught by underpaid teachers. The education system is set up on a competitive basis creating "failures" as well as "achievers" — a process used to justify social inequality.

10. The rich receive more "welfare" benefits. In 1994 a reporter for the Age newspaper calculated that the exclusive Melbourne suburb of Toorak had received more money in tax concessions from the government than the entire state of Tasmania. The tax rate for business is 30%, which is lower than the top income tax rate. Ordinary people face an unfair burden because the rich use features like tax breaks, dividend imputation and family trusts to avoid paying their share of tax.

While the corporate media focus on so-called "welfare dependency" payments to the poor, business welfare is rife. Last year a report researched and compiled for Greens Senator Bob Brown by Lauren Van Dyke calculated direct government assistance to business, through subsidies and tax concessions, to be worth $14 billion annually.

Poverty is a lifestyle choice. But it is not a choice made by the poor. The choice is made in corporate boardrooms and government offices. We, too, have a choice. If we don't want to endure endless feeble excuses from the likes of Tony Abbott, we can join the struggle for a genuine socialist alternative.

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