Australia, the parasite’s paradise

The astounding 21st-century transfer of wealth from workers to bosses continues. In fact, it seems to be gathering pace.

Australia’s richest 200 people now own $625 billion in personal wealth, equal to nearly one-quarter of the national economy—a threefold jump from 8 percent twenty years ago.

The figures were highlighted this week by the Australia Institute, a think tank, in a new analysis showing that the top fifth of the country’s households are nearly 150 times better off than the poorest fifth.

The report comes as the latest data from the Australian Bureau of Statistics show that real wages fell again in the latest quarter, having finally grown a little in the six months to March, following a massive decline over the last few years.

The Bureau’s figures show that working-class households continue to be pummelled. When accounting for mortgage interest rate rises, the cost of living climbed by 6.2 percent over the last twelve months. That’s well above the official inflation rate and nominal wage rises.

So while the rich are getting monumentally richer, the people who actually do the work to keep society functioning are getting poorer.

People who clean the streets and take away the rubbish, stack the shelves with groceries, transport the goods, build the houses and offices, teach the children, nurse the sick and injured—pretty much everyone who works for a living is getting clipped.

The Institute estimates that the top 20 percent own more than 60 percent of all household wealth, while the bottom 60 percent own less than 20 percent.

Most of the growth in wealth (and the rise in inequality) has come from “large increases in passive, unearned income” drawn from capital investments.

So not from hard work. In fact, not from work at all.

Perversely, the tax system treats this “unearned income” more favourably than it does workers’ declining real earned income. That’s one of the not-so-secrets of success the leisure class counts on.

“Currently, capital gains and wealth are either lightly taxed or completely untaxed in Australia”, the report’s authors note. “This results in the overall percentage of tax paid falling more heavily on the bulk of wage-earners, whose income is most visible but who can least afford the higher taxes.”

The government, led by a political machine still claiming to be a “party of labour”, has not proposed any change to the tax code to redress this unearned privileging of the already privileged.

In part, that’s because Labor MPs are themselves part of the ultra-privileged minority that benefits from a tax system that favours those on high incomes holding capital investments. Federal politicians are in the top 2.5 percent of income earners—the base pay of a backbencher is more than $233,000 a year; senior ALP ministers receive more than $400,000.

It’s also because Labor’s entire approach to politics is to keep the ultra-wealthy onside. The only way it can do that is by governing in their interests. And what exactly are their interests? Getting richer at everyone else’s expense, of course.

It’s not just about making people who are already here richer. It’s about making sure they have more rich friends to huddle with—in their ghettos like Melbourne’s Brighton or Sydney’s Double Bay—and plot the immiseration of the rest of us.

Indeed, the entire country has become a haven for the ultra-wealthy.

Australia is the 55th largest country in the world by population. But it consistently attracts some of the largest numbers of the world’s millionaires, who flock here in their tens of thousands to take advantage of the red-carpet welcome they receive.

Labor even introduced a scheme when last in government, often called the “golden ticket” visa, prioritising multi-millionaires. Some 100,000 took advantage of the ruse, which was recently scrapped after repeated allegations that it facilitated international money laundering.

Henley & Partners, a private client immigration consultancy that specialises in helping the world’s wealthiest people relocate to the most favourable jurisdictions, includes Australia in what it calls the Safe Haven 8 countries, “which have all positively transformed their economies by encouraging wealthy people to move there”.

By “positively transformed”, the company presumably means economies in which the wealthy breathe easy while everyone else sucks eggs.

“What is it about Australia that has it consistently mentioned as the millionaires’ migration destination of choice?” asks the firm. Part of its answer is the high-quality private health and education systems, which working-class taxpayers subsidise.

Then there’s the fact that “unlike the UK and the USA, Australia has no inheritance taxes or death duties”. This means that once wealth is accumulated, it can be more easily retained by the ultra-wealthy. There is no spirit of “giving back” here.

So the billionaires already here grow richer by the day, and more and more of their privileged kinfolk arrive every week to join Labor politicians at the apex of a scam economy ripping off the working class.