Gillard's weak mining tax is a dismal faliure

Vanguard May 2013
Bill F.

The Mineral Resource Rent Tax (MRRT) has hardly put a dent in the profits of the mining monopolies, raising a mere $126 million in the first six months rather than the $2 billion forecast by the government.

his was no great surprise, considering the loopholes and concessions granted to the big mining companies BHP Billiton, Rio Tinto and Xstrata in the initial negotiations after Gillard had elbowed out Rudd and his Resource Super Profits Tax.

For example, the tax only applies to the mining of iron ore and coal, while other minerals such as gold, nickel and uranium are exempt.

It applies to only 30% of ‘assessable profits’ which are further reduced by ‘deductible expenditure’ and a special MRRT allowance set at the long term government bond rate plus 7%. There is also a 25% ‘extraction allowance’ and state royalties are yet another deduction. The final watered down MRRT payment then becomes a deduction from assessable company income tax.

State governments in Western Australia and Queensland were given the incentive to raise their royalties, reducing the federal government share even further.

Senate inquiry

This month, the week before the federal budget is released, a Senate inquiry will report back on the effectiveness of the MRRT. Several interesting bits have emerged from the submissions already made.

Treasury Secretary Martin Parkinson stated that while the Treasury had adjusted forecasts to take account of a rising Australian dollar, falling commodity prices, and increased state royalties, it had little idea of the actual amounts the companies were depreciating their assets. “… we actually won't be able to get to grips with what's actually happened until we either complete conversions with the industry or ... the end of the financial year is completed and the firms have themselves put in their tax returns.”

How pathetic is this! The national government allows a swag of foreign and local monopolies to grab Australia’s most valuable resources on the cheap, and doesn’t even know how many (or few) dollars it can collect from its grubby dealings!

Even the Association of Mining and Exploration Companies argued that the tax was ''ill-conceived as it was the direct result of a private and secret consultation process with three large multinational companies''.

In his submission Western Australian Greens Senator Scott Ludlam made some good points, “Let's get one thing straight – these mineral resources belong to the Australian public, yet the companies that plunder them pay an average of 13.9% company tax and are 80% foreign owned.

“80% of the shareholders of the major mining companies operating in Australia are not Australians, so who is benefitting from these publicly-owned resources?

"The mining boom is shovelling vast profits out of the country. While the mining sector accounts for one fifth of company profits, it only pays one tenth of the company tax take. The original Ken Henry super profits mining tax could have harnessed the boom to deliver a sovereign wealth fund and much needed infrastructure and services for the Australian people. Instead, Labor's watered-down version has barely scratched the surface of the mountain of profits, while the Coalition would have had no super profits tax whatsoever.”

Immediate Demands of the CPA (M-L)

• Stop nation-wrecking by multinationals – nationalise and build the nation for the people!
• Regulate and control foreign investment - reject unequal “free trade” deals!
• Tax the profits of the mining monopolies! Keep the wealth in Australia!
• Develop renewable energy production
• Build clean, safe, sustainable manufacturing and value-adding industries
• Improve services and amenities in mining communities and regional areas

Ruling class spells it out

Vanguard May 2013 p. 3

The monopoly capitalist ruling class is rubbing their hands in anticipation of a change of government, which will give them another opportunity to ram through even more of their reactionary anti-worker policies.

The chieftains of big business and foreign imperialism have trotted out their agenda well ahead of the federal election, to ensure that it is taken up and factored into the electoral policies of the main parliamentary parties.

This direction was initially delivered at a dinner function held in the National Gallery of Victoria by the Institute of Public Affairs on 4th April.

The evening was hosted by gutter journalist Andrew Bolt. Among the keynote speakers were Tony Abbott, Rupert Murdoch and Gina Rinehart.

John Howard was there, as were Michael Kroger, shock jock Alan Jones, and mining tycoon Hugh Morgan.

They agreed on some 75 policies that they believe will radically transform Australia. 

Key ones are;

• The ABC is to be sold off, and SBS is to be fully privatised

• Corporations allowed to make secret payments to political parties

• Medicare will go for most Australians

• A return to WorkChoices, just by another name

• The clean energy fund and renewable energy target will be scrapped

The message was reinforced a fortnight later, when Tony Shepherd, President of the Business Council of Australia (BCA), addressed the National Press Club in Canberra. The BCA represents the 100 largest companies operating in Australia, many of them multinationals.

Among other things, Shepherd spoke in favour of smaller government with less regulation, reducing and ‘rebalancing’ taxes, changing the Fair Work Act, attracting more foreign investment, having an ‘open labour market’ along with the ‘flexibility of the 457 visa arrangement’ and ‘performance based pay’ for teachers.

While it was all slash and burn for the working class and others who depend on government services, it was music to the ears of the big mining monopolies.

“We should give Infrastructure Australia an unfettered responsibility to produce a prioritized, national infrastructure plan with focus on nationally significant projects that lift productivity”, said Shepherd, as he went on to talk on the need for nuclear energy.

Prepare to meet the challenge

This really means the lowering of living standards, turning Australia into a mining based banana republic (except with a Queen) and scrapping any vestige of national independence that Australia might still retain.

For workers it means misery at work, with deteriorating working conditions and a return towards the Eighteenth Century Master -Servant laws. No doubt Gina would like to see her $2 an hour wish come true. There is a very good chance that these scoundrels will have an opportunity to apply their agenda.

Times call us all to prepare to meet the challenge.

Fortunately, the majority of Australians, particularly those that make up the working class, want none of this.  They will fight back.

Workers struggle for secure employment

Vanguard May 2013
Ned K.

A feature of workers’ struggle in Australia at the moment is for greater security of employment. This struggle occurs at the workplace, industry, community and national levels.

At the workplace level it appears in enterprise bargaining disputes over security of hours of work, or winning restrictions on the use of labour hire or casual labour, or continuity of service when one contractor replaces another to perform work already privatised by governments.  

At the industry level, security of employment struggles are a major issue for state and local government workers where governments of both Labor and Liberal persuasion are reversing hard won ‘no forced redundancy’ policies.

At the community level, there is an increase in security of employment struggles which are framed in the media as anti-457 Visa struggles.

At the national level, unions and the ACTU launched an on-going campaign to retard and reverse the growth of insecure work.

Extent and causes of insecure work

Struggle for more secure employment has been a constant for workers in Australia since 1788. Significant gains were made in the 20^th Century with workers winning some protection against dismissals, better redundancy provisions and clauses to limit the encroachment of part time and casual labour. However, from the 1970s and 1980s in particular, imperialism launched, with willing helpers in federal and state parliaments, major attacks on employment security previously won through struggle by workers. 

ABS figures below tell the story.

For example, in 1978 the ratio of part time to total employment was 15%. In 2011 it was 29%.

In 1982, casual labour was 13% of the total workforce. By 2010, it was 28%.

In 2011, 50% of Australia’s part time workforce was engaged for less than 20 hours per week.

In the last few years, official unemployment in Australia has been about 5% to 5.4%. However under-employment, the number of workers looking for more hours of work, has sat at about 7% meaning that over 12% of workers at any one time are either unemployed or underemployed.

This is covered over by the politicians and media who keep telling us that Australians are still better off than workers in Europe where official unemployment is averaging 12%, a staggering 19 million without a job.

Attacks on unions

The growth in insecure work by imperialism and their politicians’ neo-liberal policies has been largely successful due to their attack on workers’ mass organisation, trade unions. Since the 1960s union membership in Australia has declined from a peak of about 60% to 18%. In the private sector, the figure is even lower at 13%.

The attack has taken many forms, including deregistration of militant unions, closure of organised manufacturing workplaces, privatisation of union jobs and the growth of individualised work contracts.

In Australia today, 40% of the workforce do not have the limited protection afforded by the Fair Work Australia National Employment Standards. Over 1 million workers are independent contractors, and 43% of these have no control over the work they do. They are under what the law calls ‘sham contracting’.

60% of waterfront labour, once a union stronghold, is now casually employed. Even in areas like universities, previously seeing themselves as ‘middle class’ not working class, there are currently 67,000 people employed on a casual or fixed term contract basis.

Workers fight back

Despite the situation outlined above, workers are fighting back. The defeat of the Howard Government through the Your Rights At Work campaign, led by workers and communities at the grass roots level, was a significant victory. In individual industries, such as contract cleaning through the Clean Start campaign and the Baiada poultry dispute in Victoria, workers have struggled and won better job security reflected in collective agreements.

Union membership in areas of predominantly female employment such as nursing, disabilities and community services, and child care is on the rise.

On a national scale, the ACTU secretary Dave Oliver has pledged on behalf of unions and the 2 million members they represent that the ACTU federal election campaign is not primarily about returning a Gillard Government to the spoils of office. It is about building the long term organising capacity of workers and to be a stronger union movement on September 15, 2013, the day after the federal election.

Oliver is on the correct track. The whole issue of insecure employment is really about power and which class has the upper hand. As workers become united and stronger through collective action, the balance of power between the ruling class of imperialists and their agents, and the workers and their allies, shifts. This opens up new possibilities for workers who have a country and indeed a world to win!

As Marx famously said about the myriad of struggles by workers under capitalism, “Now and then the workers are victorious, but only for a time. The real fruit of their battle lies, not in the immediate result, but in the ever-expanding union of workers.”

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Further reading:

http://www.actu.org.au/Campaigns/SecureJobsBetterFuture/default.aspx

http://workinglife.org.au/2013/04/11/heres-some-ways-we-could-fix-insecure-work/

Job security - worth fighting for

Vanguard May 2013 p. 4
Ned K.

The struggle for job security has the capacity to unite workers within workplaces, industries and across industries. There are a series of demands on the following aspects of job security that can be used to unite people in the lead up to the federal election in September this year and beyond.

• Demand jobs for all those in Australia who need to work
• Demand protection against arbitrary dismissal
• Demand permanent jobs and leave entitlements for casuals employed by an employer or labour hire company for 6 months or more
• Demand no forced redundancy policies and agreements by local, state and federal governments
• Demand no outsourcing or contracting out of work
• Demand safe work, and no loss of income if injured at work
• Demand paid training to upgrade skills required to perform the work
• Demand sufficient paid time to complete the work, no cuts to paid hours
• Demand a living wage
• Demand the right to representation and a collective voice  
• Demand an end to sham contracting under the guise of sub-contracting and/or franchising
• Demand long service leave on an industry rather than single employer basis

These are short term demands around which concessions can be won from the big business class and their spokespersons in parliament.

For example, overtime penalty rates were won years ago by determined struggle. Howard tried to whittle this away by use of individual contracts (AWAs). However workers’ struggle in the Your Rights At Work campaign won it back.

This shows what can be done when workers and communities mobilise across the country.

Determined struggle will score short term victories on the issue of job security as well. However like all hard won reforms, they can only be sustained through Australian workers and their allies winning national independence from imperialism and implementation of an economy based on people’s needs, not profit for a minority.

Another local firm goes down

Vanguard May 2013 p. 4
Nick G.

(Consumers are letting the duopoly know that they want this local brand stocked.  Messages above at suburban Woolworths store)

The vicious duopoly Woolworths and Coles have claimed another Australian scalp.

South Australian family-owned Spring Gully has been placed into voluntary receivership following a disastrous 60% decline in sales.

This follows the loss of a number of contracts with the duopoly and German firm Aldi.

The company has been making its own products under the Spring Gully, Leabrook Farms and Gardener Range brands, including gherkins, honey and jam, since 1946.  It recently entered an agreement with Dick Smith Foods to produce goods under contract - Dick Smith jams and Ozemite make up 20 per cent of the company's sales - through the major supermarket chains.

But it is not just the loss of contracts that has seen the company go down.

Local companies have to bid for shelf space and positioning against the duopoly’s own generic products, mostly sourced from overseas.  The generics and other imported and multinational brands can buy space between waist- and eye-levels, the so-called “buy level” and the local product ends up at ankle level where only the most brand-loyal shoppers can find it.

The announcement of the company’s bankruptcy prompted a furious response by consumers in SA.  Talk-back radio and on-line newspaper comment boxes were flooded by hundreds of people denouncing the duopoly and unfavourably comparing government handouts to US multinational car manufacturer GMH with the absence of government assistance to struggling local firms.

(Above: Independent Grocers Association members are working hard to keep Spring Gully alive)

Julie P. of the Adelaide Hills was typical, writing “Yes Coles and Woolies, you’ve done it again. As your saying goes down, down prices are down!!! It should be changed to Down, down another company down!!! The greed that Coles and Woolworths have is just disgusting…”

It is not just the 44 company employees who face the scrap heap care of the duopoly: fruit and vegetable growers and apiarists who supply the company will also be hit.

Although capitalists are fond of putting the blame for small business difficulties at the feet of workers and their wages and conditions, Marx was spot on when he said that one capitalist kills many.

Time to nationalise GMH!

Vanguard May 2013 p. 4
Nick G.

(Above: workers at Elizabeth GMH, Adelaide)

US giant General Motors showed its complete contempt for Australian workers and governments with its decision on Monday April 8 to cut 400 jobs in SA and 100 in Victoria.

The acronym “GMH” should really stand for “Getting Massive Handouts”.  It is really nothing more than a sinkhole of US corporate greed.

According to the Australian Financial Review, GM Holden has received $1.8 billion in state and Federal Government assistance in the past 12 years.

In 2009 politicians gathered at Holden to announce an A$149 million government grant that they claimed would support 600 new jobs at the Elizabeth facility.

Not only did those jobs not eventuate, but more were cut.

GMH axed 100 jobs at the plant in February 2012, another 170 jobs in November 2012 and 400 jobs this week.

This is despite getting a $275 million federal government “co-investment” package in March 2012 that Julia Gillard declared would “support thousands of jobs at Holden that would have been lost if the company had stopped making cars in Australia.”

It is despite a further $50 million from the SA state government personally negotiated with GM bosses in Detroit by Premier Jay Weatherill and which supposedly contained guarantees about minimum employment levels.

“It was an agreement with the chief executive of General Motors Holden, Mr Dan Akerson,” said an angry Weatherill after the job cut announcement. “It was an agreement that I shook my hand with that man on.”

Weatherill’s naivety aside, illusions still run deep within the Labor Party and the trade union officialdom about the future of General Motors in Australia. Part of this is due to the fact that at the same time as they reduce the workforce, General Motors are still investing in new equipment at the assembly plant in Elizabeth.

However for the first time, a General Motors spokesperson today said that there were no guarantees about the future of General Motors manufacturing in Australia and that the cost of producing a car here, largely because of the high Australian dollar, had risen 60% in 10 years.

So all the signs are there for either a closedown within 5 years or so, or perhaps the engine plant in Melbourne stays and the assembly plant at Elizabeth shuts down completely.

Rather than waiting passively to see what GMH decides to do, governments should grasp the nettle and make some decisions of their own.

SA Unions executive, condemning GMH, has called on Weatherill to redirect SA’s $50 million to retraining laid-off GMH workers.

But the best course of action would be for GMH to be nationalised without compensation and run as a state-owned advanced manufacturing facility with a focus on green technology and cutting-edge sustainable productive tasks with a highly skilled workforce.

It is impossible to see this happening under capitalism, whose fate it is to preside over the destruction of the productive forces.

Such a move to create and develop advanced new productive forces would be a step towards a nationally independent economy led by the working class.

It needs to be part of our agenda for an independent and socialist Australia.

……………………………

Further reading:

http://vanguard-cpaml.blogspot.com.au/2012/11/its-been-going-on-too-long-time-to.html

SA Unions protest against imported products

Vanguard May 2012 p. 5
Contributed

Union leaders told a workers rally, held on 12 April, at the SA Health and Medical Research Institute (SAHMRI) that the use of Australian materials in government projects would be an election issue in both the state and federal elections.

The speakers pointed out that the new Royal Adelaide Hospital, SAHMRI, Adelaide Oval and Adelaide Convention Centre use imported materials.

 Aaron Cartledge, state secretary of the CFMEU highlighted the fact that the “entire facade of the SAHMRI was manufactured in China”.

He said that the CFMEU intends to audit sites of multi-billion dollar government-funded construction projects in Adelaide over the next couple of weeks to see what products are being made in Australia.

The audit is part of the union campaign called `Let’s Spread It Around’ calling for the benefits of the mining boom be spread through the community. Advertisements will run during the Crows and Power footy match as part of a continuing strategy to win public support.

Janet Giles, SA Unions secretary informed the workers that the mining wealth was going to a small cabal and blamed the “big miners, four major banks and two supermarkets” as the major perpetrators.

“We are good at fighting battles but have been losing the war - we should have been running this campaign (to spread the wealth) for the past 10 years,” Giles argued.

AMWU union leader John Camillo said Australia needed manufacturing and explained he had just asked the new RAH project manager to name products in the project that were being made in Australia.

 “Glass? None,” Mr Camillo told the workers. “The 700 shower cubicles? None. Hot and cold water taps? None. All this is coming from overseas.

“If we are going to use taxpayers’ money on these projects we want a better outcome, with jobs and a future for our children… We have to put pressure on the State and Federal Governments to ensure that when taxpayers’ money is spent on these big projects it results in jobs, making products here in Australia - this is going to be a long campaign.”