Thursday, December 12, 2019

Big multinationals still dodging tax


Written by: Nick G. on 13 December 2019

Latest figures from the Australian Tax Office (ATO) show that big multinational corporations are continuing to evade their obligations to pay tax on their Australian earnings. They have been doing this for many years, but the ATO has only made data available since the 2013-14 financial year.

The figures for the 2017-18 financial year, the fifth in a series of annual reports on the tax status of entities considered to be the biggest 2200 companies in Australia, showed 32% paid no tax on billions of dollars of Australia revenue.

The figures cover public and foreign-owned corporations with a total income of $100 million or more, and Australian-owned resident private companies with a total income of $200 million or more.  These cut-off points actually enable thousands of very profitable large foreign and local companies to avoid public scrutiny.

Australian tax laws require companies to pay a 30% tax rate on their profits.  Unlike individual tax-payers, they are not taxed on their income, but on what they can cleverly claim to be their annual profits.

The following table lists the income, tax payable and tax paid by the first 5 (alphabetically listed) member companies of the Business Council of Australia whose 100 or so members constitute the core of the Australian ruling class.

 

BCA Member Company
Total Income
Tax Payable
Tax Paid
       
Accenture
2,139,397,646
110,877,856
32,392,961
AGL Energy Ltd
11,937,111,946
9,526,762
2,786,458
Alcoa of Australia Ltd
4,606,084,558
1,474,280,687
438,797,274
Alumina Ltd
392,076,018
497,596,404
Nil
Amcor Ltd
5,081,720,569
Nil
Nil
       
Total
24,156,390,737
2,092,281,709
473,976,333

The figures show that these five companies alone were able to reduce their tax payable to a mere 8.6% of their income, and paid tax of only 1.9% on that income.

I don’t know many workers who can evade tax to that extent!

The rorts embedded in the company tax system that allow tax refusal on this scale include:

• carrying over losses from previous years,
• inbound supply chain rorts where local subsidiaries of multinational companies are charged over the odds for goods they sell in Australia, locking the profit away offshore,
• related party finance deals under which offshore companies in a multinational loan their Australian associates money at usurious rates, making sure little or no profit is made locally, and
• companies selling intellectual property, such as patents, to an offshore affiliate for less than the IP cost to develop and then lease it back.

Although under significant public pressure to make companies comply with their tax obligations, the Australian Tax Office treads very gently around the issue.
ATO deputy commissioner Rebecca Saint claimed that “voluntary compliance with tax law by big companies” had improved, but was still in need of further improvement.

So, the core of the ruling class, by the ATO’s own admission, is subject only to “voluntary compliance” with Australian tax law.

That means big foreign-owned multinationals like ExxonMobil which savaged its workforce at Longford in Victoria, demanding they accept wage cuts and cuts to annual leave and shift loading, paid no tax on the income their workers had made for them.

For the record, ExxonMobil paid no tax on Australian earnings of $9,617,324,823 in 2013-14; on $8,464,272,972 in 2014-15; on $6,728,562,395 in 2015-16; on $8,360,800,462 in 2016-17; and now, on $9,234,164,781 in 2017-18.  So, over five years, ExxonMobil has had an income of $42.3 billion in Australia, and paid not one single cent to the AT0!


Australia’s richest man, Anthony Pratt, controls Pratt Consolidated Holdings which again paid no tax, despite a turnover of $2.8bn and a taxable income of $59.1m.

Collectively, these parasites siphon off and keep for themselves so much of the immense wealth created by Australia’s working people.  This is wealth that could more than pay for the improvements in education, health, community and social services, for reparations and compensation to First Peoples, and for action on climate change and the environment (see our recently released Draft Fighting Program)

We must force the rich to pay!

We must have the multinationals in our key industries nationalised!

We must aim for an independent and socialist Australian Commonwealth where wreath is indeed held in common, by the people, for the people!

Wednesday, December 11, 2019

Papua New Guinea assessing options as regional tensions grow

Written by: (Contributed) on 11 December 2019
(Prime Ministers Marape, left, and Morrison, right)

An increased aid budget from Canberra to PNG together with a further loan, has highlighted the continued importance of the South Pacific country for Australia.

In recent years, however, the neo-colonial relationship has become tense and problematic; Canberra can no longer take their hold over PNG for granted.

Behind the scenes two discussions taking place in military circles reveal the heightened importance of PNG for regional defence and security considerations.

In late November the Morrison Coalition government in Canberra made an additional loan to the Marape government in Port Moresby of $442 million, the details of which were not divulged by Australia. (1) It is also important to note the loan was heavily discounted at only 2.5 per cent and the terms did not include information about when it was expected to be repaid or whether it was subject to other conditions. 

 

The loan was also accompanied by an increased aid budget:

                                             

2018-19  $578 million
                                               

2019-20  $512.3 million
                                                      

2019-20  $607.5 million (total). (2)

 

The moves followed an official five-day state visit to Australia by incoming PNG Prime Minister James Marape and several cabinet ministers last July where agenda items for high-level diplomatic discussions included trade and investment and defence and security. (3)

Behind the bonhomie and affable discourse, serious diplomatic problems have arisen in recent years between the two countries. PNG, a country hugely rich in mineral resources and raw materials, has remained desperately poor for the mass of the population with large divisions between those who are regarded as well-to-do and the estimated eighty per cent of the population who remain poor with few opportunities. Planned electrification of the country has a stated goal of providing only seventy per cent of the population with access to electrical supplies even by 2030. At present, only an estimated thirteen per cent of the population, have ready access to electricity. (4)
   
Since independence in 1975, however, Australian-based mining companies in the country have kept their shareholders content with large returns. The neo-colonial relations foisted upon PNG by the Australian colonial administration, since the mid-1970s, have acted like a siphon: wealth has been extracted and ordinary people have seen little or no real benefit for their peoples. A new generation of PNG’s political leaders are now, however, not as keen to pursue traditional neo-colonial policies without questioning other options opened to them with closer links to China; they are aware of alternatives.

Marape government agenda and options

The election of Marape earlier in the year is perhaps a good example of the recent historical development; soon after taking office he pledged his administration to a tougher stance toward energy and mining companies exploiting PNG. He was quoted as warning PNG did not want to be known as just 'an oil and gas country', and that he was also campaigning for foreign-based companies to pay their fair share of tax. (5) The more assertive stance taken by the PNG government has created further implications for Australian foreign policy toward the South Pacific. 

Resting upon economic considerations favourable to Australia lie military and security considerations. Australian military planning has argued for decades that PNG is a defence and security buffer to repel possible incursions and threats to sovereignty from the north. PNG, therefore, while having its own defence forces and intelligence services, has relied heavily upon Canberra for increased provision. The provision has then rested upon bigger US-led regional provision, which rely upon intelligence facilities at Pine Gap, Central Australia as part of a global-wide network.

In recent times, however, US-led foreign policy toward the region has been shaken out of neo-colonial arrogance and complacency with the rapid rise of China, which is now regarded as a threat to traditional positions of domination and control. It is interesting to note, therefore, how US-led regional considerations have been played-out recently with PNG; the country is not in an economically healthy position. Following an announcement that the Marape government was considering a move to re-finance the entire national $1.8 billion public debt with a loan from China, the administration turned to Canberra with a request for $1.5 billion loan. (6)  

While the Marape administration secured only $442 million from Canberra the fact the negotiated amount has remained subject to a refusal by the Morrison government to provide details has revealed the tense nature of the diplomacy between Australia and PNG. Whether the smaller loan is part of a longer-term bigger package has yet to be established. The move was also a departure from existing diplomatic relations where Canberra had continued to refuse any budget support loans to PNG for the past two decades. (7) It tends to reveal how important PNG has remained to the US-led regional position with Australia.

US imperialism’s military planning

The recent high-level diplomacy between Australia and PNG has been accompanied with numerous references to US-led regional military planning.

It is, therefore, quite common to find references to real-war scenarios in ordinary defence media releases; they do not hide their aggressive military posturing. A recent release from the US-led RAND-Australia noted, for example, 'we must be prepared for high-intensity conflict in our region'. (8) The stream of assessments also includes a preoccupation with range and capacity of military facilities and adequate basing agreements; both considerations are linked.

A major discussion concerning whether the ADF should purchase B-21 Raider bombers for air-born attacks has been linked to 'long range strike capacity', as opposed to relying upon other aircraft. (9) The same media releases also identify China's artificially-created islands built on the Nansha Islands (Spratly Islands) as 'a prime target for future long-range strikes'. (10)

The island masses in the South China Seas have become a focal point for US-led military exercises in the region; in late November US navy ships sailed near the islands on two occasions, raising diplomatic tensions between the US and China. (11) To date, however, Australia has been reluctant to follow the US naval manoeuvring in the South China Seas. Canberra, nevertheless, has followed US military planning in other regards.

A further statement from Canberra about the matter included reference to 'Australia's strategic space as some countries develop military bases there, including the South China Sea within reach of northern Australia'. (12) The same statement also included a further reference to 'planning for the defence of Australia, and for operations in our region of primary strategic concern'. (13) And it is perhaps there that the significance of recent high-level diplomacy between Australia and PNG rests.


US-led moves last year to re-establish a working military base at the Lombrum facilities on Manus Island (above) are now well under-way. They have been conducted with some considerable secrecy, although various media releases have concentrated upon the introduction of higher-level military technology and intelligence facilities. The ADF have recently been 'devising a strategy to develop hi-tech soldiers and weaponised robots under a new program to modernise levels of protection and lethality for front-line troops', with specific reference to 'communications and battle-management systems'. (14) A recent statement from Canberra, likewise, made reference to the 'many ways to project military force at a distance including...proper basing agreements'. (15)

It has also been noted in other media releases that the Lombrum facilities are situated near to the Momote airfield which 'would be a valuable base for Australian and allied maritime surveillance aircraft', with 'Manus as a forward operating base'. (16)

The US-led planning for the Lombrum base would appear far more important than a relatively small military facility in the South Pacific; taking an arc from Pine Gap to the Lombrum facilities and then using it to project the range has revealed it swings through the South China Seas and also Guam, a further sensitive US basing agreement in Micronesia. (17) US-led facilities based on Guam have also been upgraded in recent times to become a hub for military operations and also eventually form part of 'a region-wide missile-defence system' which include a range to 'cover all of North Korea, but also to peer deeper into China'. (18)

It is also interesting to note the Lombrum military facilities lie on a tangent 15 degrees east from Pine Gap, with the South China Seas lying 15 degrees west, revealing other aspects of the US-led military planning including the range of the area of surveillance.

As the present US-led Cold War has heightened tensions across the region we should be distancing ourselves from possible, and indeed likely, real-war scenarios:

We need an independent foreign policy!

 

1.     Details of $442m PNG loan to remain secret, Australian, 28 November 2019; and, PNG exploited China fear for $442m bailout, The Weekend Australian, 30 November – 1 December 2019.

2.     Development Assistance PNG, Department of Foreign Affairs and Trade, Canberra.

3.     PNG leader to visit Australia, Reuters, 16 July 2019.

4.     'We will work with Beijing in Pacific', Australian, 25 October 2019.

5.     PNG seeking better Oil Search gas deal, The Weekend Australian, 27-28 July 2019.

6.     Weekend Australian, op.cit., 30 November – 1 December 2019; and, PNG asks Australia for $1.5 bn., ABC News, 19 August 2019.

7.     Australian, op.cit., 28 November 2019.

8.     Stealth bomber is handy, but it may not be the perfect fit, Australian, 22 November 2019.

9.     Ibid.

10.   Ibid.

11.   US navy sail-pasts infuriate Beijing, The Weekend Australian, 23-24 November 2019.

12.   Our strategic risks are changing and so must our defence thinking, Australian, 26 November 2019.
13.   Ibid.

14.   ADF aims to wage robo war, Australian, 27 November 2019.

15.   Australian, op.cit., 22 November 2019.

16.   Benefits for all in Manus being a base for US and Australian forces, Australian, 29 August 2018.

17.   Philips Projection, Actual Size World Map.

18.   U.S. seeks new Asia defences, The Wall Street Journal, 24-26 August 2012.



Monday, December 9, 2019

Study contradictions for coming struggles

Written by: Nick G. on 10 December 2019 

The domestic situation in Australia is characterised by growing distrust of the main parliamentary parties, and by increasing repression and secrecy on the part of the Morrison government.

The economy is sluggish at best and increasing numbers of workers are faced by no wage growth and by long-term precarious employment. People of all ages including young people unable to enter the workforce, and middle-aged and older cast-offs from the ranks of the employed, struggle to survive on the desperately low Newstart Allowance. The farmers are in the grip of a prolonged drought and are at the mercy of big mining and agribusiness companies who control upstream water resources.  A private market in water has been created and is controlled by finance capital.

In our region, the maneuvering by US imperialism and Chinese social-imperialism in the Indian and Pacific Oceans is intensifying.  The small island nations of the South-west Pacific are playing one off against the other, but this is a dangerous game.  US imperialism is demanding that Australia play a bigger role in securing US interests in the region, and a McCarthyist anti-China wind is being whipped up by its servants in our country with Chinese-Australians becoming increasingly apprehensive.

Growing numbers of young people are taking a stand against global warming, and identifying multinational fossil fuel companies as the target of their campaigns. Sydney, Canberra and Brisbane’s sepia-tinted skies are testimony to the scale and ferocity of bushfires. Indeed today, Sydney is so shrouded in smoke that fine particle pollutants have registered at 11 times the level deemed to be hazardous; bushfire smoke has triggered false fire alarms in Sydney buildings; visibility is low across the city and residents have been advised to stay indoors.

On Thursday November 14, Prime Minister Scott Morrison arrogantly refused to meet with the group called Emergency Leaders for Climate Change and dodged questions about the link between climate change and the devastating bushfires that broke out in NSW on the previous Friday.

The coalition of 23 fire and emergency services leaders from every state and territory wanted to present to Morrison a call for a climate emergency to be declared. They had previously sought a meeting with him last April, which was also refused. They accused the government of wanting to gag debate on climate change. Today, he rejected calls for additional support for volunteer firefighters struggling in 40°C temperatures, saying “they want to be there”.

Environmentalists and traditional land owners join forces across the nation to oppose fracking and other destructive practices, including proposals by Norwegian multinational Equinor to drill for oil in the whale-breeding waters of the Great Australian Bight.  Police violence is unleashed on protesters outside an international mining conference in Melbourne.

Restlessness and an expectation of the need for struggle is awakening in the working class.  Strikes and picket lines are enthusiastically supported by students, fellow unionists and community members.

Developing levels of struggle across many sectors can be expected to develop unevenly for the time being, but the general direction is for solidarity and broad mutual support.

As the year draws to an end, we must reflect on the contradictions embedded in our social circumstances and set the scene for better and bigger involvement in struggles in the future.

Friday, December 6, 2019

China, the US, the S-W Pacific and “critical mineral” projects

Written by: Contributed on 7 December 2019 

It is always important to monitor how decision-makers in Canberra and the business classes think.

A recent briefing paper about the South-west Pacific, for example, followed an almost set pattern of pushing the US-led Cold War agenda by highlighting the rise of China and attempting to formulate superficial hypothetical military scenarios, while failing to elaborate around the importance and significance of various developments.

There is no wonder, therefore, why such people push wave after wave of militarism, as part of aggressive foreign policy. It is the natural outcome of US-led regional planning.

Almost hidden within the briefing paper, however, lay two paragraphs of highly incriminating information linking their failure to tie effective neo-colonial policies in with recent US-led regional military and security assessments.

At the end of October, the Future Directions International (FDI) organisation published another Strategic Analysis Paper about the South-West Pacific. The seven-page briefing paper, China's Strategic Objectives and Ambitions in the South West Pacific, formed part of a series of similar publications primarily for Canberra-based decision-makers and the Australian business-classes. (1)

Much of the information within the publication was re-hashed from previous papers and included reference to Island Chain Theory. (2) The military theory is a relic of the previous Cold War, when US-led military planners sought to chart the Asia-Pacific region amid chains of small land-masses used to delineate sensitive areas, for perceived encroachment by adversaries into areas traditionally dominated by US imperialism. In recent times Pentagon military planners have re-used the theory specifically for assessing China's rise and its perceived threat to US hegemonic positions. It, therefore, does little to enhance the position of the FDI organisation to grant Island Chain Theory credibility; it was largely discredited with the demise of the previous Cold War, although right-wing military hawks in the corridors of power in the Pentagon kept it in wraps for future use, as, and when, required.

It is, therefore, no surprise to find the FDI briefing paper does not differentiate between China as a sovereign power as recognised by the United Nations, and the Chinese Communist Party (CCP), in classic Cold War mode with the specific intention of demonising all activity by the former in the name of the latter. (3) It is interesting to note, therefore, the briefing paper did acknowledge that China's political aspirations in the region were unlikely to transgress beyond trade and diplomacy, highlighting a contradictory pattern of thinking also found elsewhere in the publication. It stated, for example, that 'it is highly unlikely that Beijing will be able to convince these territories to move further into its orbit, given the long-standing political, economic and cultural ties between island territories and their respective metropolitan states'. (4)
Elsewhere in the briefing paper, passing reference has been given to the remote location of the South-West Pacific and the fact the small region 'traditionally commanded very little international political attention'. (5) While the paper did acknowledge the area was 'traditionally regarded by Canberra as Australia's backyard', it did not specify it was subject to US-led regional military planning, with outsourced responsibilities given to Australia for defence and security. (6) The logical inference of the FDI position could be regarded as a failure by US-led allies Australia and New Zealand to establish effective neo-colonial policies to economically develop the countries of the region. To the contrary, these US client states would appear to have been content to keep the countries poor as a means of prolonged control. US-led military planning, likewise, was designed to control strategically-placed landmasses for hegemonic positions.

It is not particularly difficult to establish the chain of command.

The shadowy trail of intelligence links and traditional positions of domination and control has revealed the historical diplomatic relationship between Pacific Islands, Australia and the US. Australia has hosted US intelligence and military facilities based at Pine Gap for decades. They are closely linked into similar facilities on Diego Garcia in the Indian Ocean. US-led military planning, therefore, has been keen to maintain a cordon around Australia for military and security provision. Each Pacific Island has historically had its own intelligence service, linked into Australian regional provision and, invariably, the British Commonwealth. Resting over the top of the intelligence relationship, however, the US maintains its global networks which link Five Eyes (Australia, Canada, the UK and NZ) relations with the Pentagon. 

Nevertheless, the paper says that 'it is little surprise that Beijing has now turned its attention toward the South Pacific', without providing a suitable explanation. (7) Whether the omission has been done to serve Cold War US-led agendas has not been clarified, although it would certainly appear to serve the purpose

China's regional foreign policy and diplomatic position toward the South-west Pacific has rested upon its rapid economic expansion: the briefing paper, interestingly, focussed upon China's foreign aid budget toward the South-west Pacific although it has amounted to only a fifth of that provided by Australia. (10) The explanation provided by FDI was that China sought to 'break out of Washington's efforts to contain China's influence and displace the US as the dominant Pacific power'. (11)

The briefing paper has remained bogged-down in military-type assessments which include reference to future plans by China to increase their numbers of aircraft-carriers and other equipment. (12) Reference to the fear that China is planning a military base and naval facilities somewhere in the region is, likewise, dealt with more along the lines of a psychological obsession and paranoia rather than a means by which Beijing is attempting to secure remote supply-lines and trade routes. (13)

US imperialism and regional natural resources control

The most important part of the briefing paper, however, lay in a mere two paragraphs under the heading: Assessing Natural Resources. (14) Light was thrown into a very dark corner of US regional aspirations.

A number of the countries in the South-west Pacific are known to possess rare-earth minerals and other metalloids within their Exclusive Economic Zones. (15) The briefing paper acknowledged China had achieved the technological expertise to assist countries in the region with mineral exploration. It also acknowledged that the ability of the countries to shift their trade away from an agricultural base 'is definitely in their natural interests'. (16) No further elaboration was provided although such a move would effectively challenge traditional neo-colonial positions foisted upon the countries with political independence designed to maintain economic control. No reference, therefore, was provided about how 'Pacific interests' might come into direct confrontation with 'US interests'.

The section in the briefing paper about natural resources was concluded without further elaboration. It has not been difficult to establish a suitable explanation: the ability of Pacific Island countries to develop their own rare-earth facilities with expertise from China would enable governments to gain greater bargaining power when dealing with US-led allies including Australia. 

Elsewhere US disquiet about China's expertise at extracting rare-earth minerals has not been difficult to access from the public domain. The findings, nevertheless, reflect badly upon US planning and have, therefore, been played-down to avoid unnecessary publicity about the shortcomings.

Two recent single-column articles in the Australian newspaper, nevertheless, provided information of a highly sensitive nature: the first stated a $4.4 billion fund linked to the defence budget was to be 'thrown open to potential rare-earths miners as part of the federal government's latest efforts to stimulate a new wave of mining projects'. (17) The mining projects concerned were specified as 'critical mineral', and included cobalt, magnesium, vanadium and chromium. (18)     

The second article elaborated upon concerns in Canberra that 'China dominates not only mining of rare earths, but also processing and conversion of the materials into alloys, metals and magnets'. (19) The outcome is that China has gained a strategic advantage with cutting-edge technological development for the production of mobile telephones, wind-turbines, electric cars and military equipment including fighter jets. (20)

One single paragraph, almost hidden in the articles, encapsulates the problem confronting US-led strategic planning. The market for rare-earths mineral exploration is regarded as 'weak'. Companies interested in beginning projects directly linked into Australian military and security provision generate, at present, too little profit to be considered viable. (21)

An important consideration, therefore, has arisen: part of the Australian military budget has been opened to boost the profits of mining companies and returns for share-holders, with very little publicity. It was not intended for that purpose and would tend to show the present Coalition government clutching at straws as a means of rectifying their failure to address important military and security considerations. Such people, however, are specifically recruited from elite patronage systems and groomed to not ask too many questions; they have, for generations, followed directives issued from Washington and the Pentagon. 

And as for the FDI briefing paper, it can perhaps be viewed in the light of providing more information about what has come to pass as superficial business and diplomatic intelligence material rather than factual information readily accessible elsewhere from within the public domain.          

It does, nevertheless, serve to provide evidence of just how far Australia has been pushed into the forefront of US-led foreign policy toward the South-west Pacific, including all which that entails: neo-colonialism and military planning for real-war scenarios;

We need an independent foreign policy!


1.     China's Strategic Objectives and Ambitions in the South-West Pacific, Strategic Analysis Paper (SAP), Future Directions International (FDI), 31 October 2019.

2.     Ibid., pp. 4-5.

3.     Ibid., page 2; and, The Assault on the West, Ian Grieg, Surrey, 1968), with a foreword by Sir Alec Douglas-Home, a leading member of the British Conservative Party and supporter of white supremacist regimes in Southern Africa. Throughout the 357 pages of the publication, lists of supposed front organisations linked to various Communist Parties are accompanied by right-wing military assessments of the prevailing balance of forces during the previous Cold War.

4.     Ibid., SAP/FDI., page 6.

5.     Ibid., page 3.

6.     Ibid., page 2; and, US to lift its Pacific clout to counter China, Australian, 26 July 2018, provided an official media release from Canberra about the AUSMIN Consultations which included reference to the region as 'Australia's part of the world'.

7.     Ibid., SAP/FDI.

10.   SAP/FDI., op.cit., page 2.

11.   Ibid.

12.   Ibid., page 5.

13.   Ibid.

14.   Ibid., page 6.

15.   Ibid.

16.   Ibid.

17.   Miners to secure defence funding, Australian, 14 November 2019.

18.   Ibid.

19.   Warning on rare earths funding, Australian, 15 November 2019.

20.   Australian, op.cit., 14 November 2019.

21.   Ibid.