Google+ Followers

Thursday, 1 May 2014

Heavy lifting....for some

Heavy lifting....for some

Heavy lifting….for some

rich regard wealth as a personal attribute. So do the poor. Everyone is
tacitly convinced of it. Only logic makes some difficulties by
asserting that the possession of money may perhaps confer certain
qualities, but can never itself be a human quality. Closer inspection
gives this the lie. Every human nose instantly and unfailingly smells
the delicate breath of independence that goes with the habit of
commanding, the habit of everywhere choosing the best for oneself, the
whiff of slight misanthropy and the unceasing consciousness of
responsibility that goes with power, the scent of a large and secure

— Excerpts from rich people’s code of living, The Man Without Qualities, Robert Musil

When Kerry Packer appeared before the Print Media Inquiry in 1991 he famously said

“Now of course I am minimizing my tax and if anybody in
this country doesn’t minimize their tax they want their heads read
because as a government I can tell you you’re not spending it that well
that we should be donating extra. I pay whatever tax I am required to
pay under the law, not a penny more, not a penny less”

His daughter Gretel got married earlier in the year and Kerry spent $3 million on her wedding. Apparently, that same year he paid no income tax.

In 2012, mining magnate Nathan Tinkler of Whitehaven Coal put his
plans for a $13 million beachfront pad in Newcastle on hold and moved
his family to Singapore. In an amazing coincidence, Gina Rinehart has
reportedly spent $S57 million ($A43.8 million) on two units, off the
plan, in the same Seven Palms Sentosa Cove condominium project.  Eduardo
Saverin, who co-founded Facebook at age 21, also lives in Singapore.

It might be because Singapore is a nice place that so many
mega-wealthy people are flocking there – or it could have something to
do with the fact that capital gains are not taxed. Individuals are only
taxed on income earned directly in Singapore, and for the super wealthy,
there are no inheritance taxes. Personal tax rates in Singapore are
among the lowest in the world, with a cap of 20 per cent, compared to
the top tax rate of 45 per cent in Australia. It’s got the banking
secrecy laws, it’s becoming a financial centre, new casinos and now a
lot of the big banks are operating out of Singapore purely because it’s
becoming a very exclusive place to live

Gina Rinehart’s personal wealth is
more than two times greater than the gross domestic product (GDP) of
Cambodia, population 14.5 million. She has about 41 times more than the
GDP of East Timor, population 1.3 million. She has more than the GDPs of
Haiti and Bolivia put together (combined population 20 million).

She could buy up the economies of the world’s 10 poorest nations, and still have about $22 billion left over.

One in seven people — or 1 billion people around the world — do not have enough to eat. Rinehart could feed them all for a year.

In 2011, Rinehart made $1.5 billion more than was spent on the entire
NSW health system ($17.3 billion). She made 18 times more than was
allocated to the federal government’s climate change department. She
made 70 times what the federal government will spend to improve
education and training for young Aboriginal Australians.

In 2012 BRW Magazine said that Rinehart’s rise in wealth “is
unparalleled”. It said she might soon become the world’s richest person:
“A $100 billion fortune is not out of the question for Rinehart if the
resources boom continues unabated.”

Despite her huge fortune, Rinehart is convinced she pays too much
tax. Her tax lobby group ANDEV (Australians for Northern Development and
Economic Vision) campaigns to cut taxes on mining industry profits and
lower payroll and income tax.

In February 2013, the Coalition released its policy/discussion paper ’2030 Vision for Developing Northern Australia’.  The catalyst for the policy was a 2010 open letter signed
by the executives of over 50 resources companies that called for the
establishment of a special economic zone with fewer regulations and
taxes to develop Australia’s north, and the capacity to import cheap

“Various industries in Australia already make use of
overseas countries’ labour without restriction – for example, sending
work overseas to India and the Philippines and elsewhere in Asia where
labour costs are lower. The group argues mining companies should be
allowed to hire short term workers from overseas for the construction
periods only, for say up to two years and nine months, thereby
increasing long term job prospects in Australia, rather than becoming
uncompetitive and these jobs heading overseas to countries like Guinea
and other countries in Africa.”

It was quickly followed by the establishment of ANDEV, a lobby group
chaired by Gina Rinehart to realise this vision. The Institute of Public
Affairs was soon recruited to give the project a veneer of free market

ANDEV’s plan was not just a slight drop in taxes. It included vast
sums of taxpayer investment in infrastructure, accompanied by the
abolition or dramatic reduction of taxation levied. The Coalition policy
has wording pulled straight from the ANDEV site in a series of op-eds
and speeches. The 2012 National Party Conference keynote address, given
by one of Rinehart’s employees, was dedicated to promoting this vision,
going so far as to include ANDEV promotional material in all delegate’s
packs and exhorting the audience to meet with him to discuss ANDEV

The central thesis behind the ANDEV plan is that northern Australia
is ‘underdeveloped’, ‘underutilised’ and ‘underpopulated’. The
Coalition’s policy adopts these claims uncritically, spicing them up
with promises of taming Australia’s ‘last frontier’. ANDEV also bandies
around some odder reasons; the “multitudes of snakes” and “excessive
heat” that afflicts residents of the North apparently entitles them to
generous tax offsets. The latest Coalition incarnation of the policy
leaves it to a future white paper to review how to achieve a
preferential taxation regime without ending up in the High Court as it
is probably unconstitutional.

Going on the word of vested interests, especially when the result is
worth a huge influx of government subsidies, does not make for sound
economic policy. Herein lies the problem at the heart of the Vision for
Developing Northern Australia: it’s been driven from the office of a
vested interest into a Liberal party that can no longer distinguish
between crony capitalism and free markets. It undermines federalism by
subsiding infrastructure spending and tax cuts without imposing the
fiscal responsibility that a state faces in having to balance the books
on this equation.

In 2010, the mining industry spent over $22 million in six weeks on
its campaign against Kevin Rudd’s plan for a resource super profit tax.
This led to a slump in Rudd’s popularity contributing to the Gillard
takeover and the subsequent compromise deal on the MRRT costing the
nation billions in revenue.

In March this year, the ATO announced an amnesty
for off-shore tax evaders. Under the disclosure initiative, those who
come forward will “generally” only be assessed for the last four years,
even if they held the assets offshore for longer than that, and be
liable for a maximum shortfall penalty of just 10% of their debt rather
than 90%, the ATO said. Those coming forward also will escape
investigation by the tax authority, and will avoid criminal prosecution.

While these people are busy investing their money and lobbying the
government so they make no contribution to the country that has afforded
them such wealth, average Australians are being hit with a “sick” tax
and a deficit tax and told that we must work till 70, that pensions will
decline in real terms, and the minimum wage will be slashed. We will
continue to hand over billions in fossil fuel subsidies, spend billions
on infrastructure for the miners, and provide guarantees for banks while
we listen in amazement to the profit announcements. We will continue to
provide tax concession schemes like negative gearing, investing in
superannuation, and private health insurance rebates.

Gina Rinehart wrote and self-published a book called “Northern Australia and then some: Changes we need to make our country rich.” I will close with a quote from a review done by Cameron Whitehead at Crikey.

“What she has produced is a weirdly amateur book which is
everywhere inscribed with the signature of someone accustomed to
command but it is also — sometimes with a wildcard, unexpected
poignancy — the work of someone who is blind to how she is being
perceived. This is a book that reveals a woman for whom love, work and
money are indistinguishable, a woman who has so much, and yet so

No comments:

Post a Comment