“No fair!” the rich brats of Australian capitalism cry. They screech, flail and kick because they believe, like the odious children in Charlie and the Chocolate Factory, that they deserve more treats. Veruca Salt ended up in a garbage chute. Under this Labor government, that kind of justice seems unlikely.
The screaming about “tax grabs”, “death taxes”, “class war” and “communism” from the sorry brigade of start-up shysters, investors, small businesses, big capitalists, right-wing journos and politicians is an absolute festival of reaction. You would think from their levels of hysteria that Jim Chalmers had nationalised the banks and repossessed all investment properties and shares.
Yet all Labor has done is introduce a few mild changes to reduce some grossly unfair tax concessions designed for the wealthy middle classes. The government is changing the capital gains tax discount from a flat 50 percent to a system indexed to inflation. It is slightly limiting negative gearing—the accounting trick that allows property investors to have operating losses subsidised by the rest of us at tax time. The changes affect only a small layer of the population—and by “affect”, we mean “slightly reduce some of their discounts”.
Labor has also imposed a 30 percent minimum tax rate on trust funds. According to the Master Builders Association, tradies everywhere depend on these trusts. Yeah right. Given the number of such trusts, it’s a wonder any capitalists get a look in.
Combined, the measures will raise about $8 billion over the next four years. For comparison, Labor is stripping $38 billion from the NDIS while pouring another $14 billion into the military machine over the same period.
The real story of the budget is what Labor did not do.
The government did not raise corporate taxes. It did not tax gas exports or mining super profits. Giant corporations will continue siphoning billions out of the country while paying basically no tax. There is still no inheritance tax, despite Tim Wilson and other conservatives spending the last week foaming at the mouth about “death taxes”. Such taxes actually exist in many countries, including well-known communist regimes like the United States.
Australia’s rich will continue to live under one of the softest tax regimes in the OECD.
And they know it.
That’s why the stock market barely blinked. Bond traders did not leap from office windows. There was no capitalist apocalypse on budget night. The ruling class understands perfectly well that Labor remains a safe pair of hands.
In fact, the budget contains plenty of goodies for business. The main demand from business owners was a 25 percent reduction in “red tape”; they are happy with Chalmers’ steps towards this. No Labor government is complete without promising to make life easier for corporations while explaining to nurses and teachers why there is apparently no money for pay rises.
So why the meltdown?
Because Australia’s wealthy middle classes regard every tax concession as some sort of inalienable human right. This is right-wing campaign. It is a classic example of the alignment of middle-class and capitalist interests in the class war.
These people genuinely believe society rests upon the heroic shoulders of landlords with four investment properties in the city and a holiday house on the Mornington Peninsula. They view themselves as persecuted wealth creators bravely resisting the tyranny of contributing slightly more to the society that made them rich in the first place.
In the right-wing imagination, the true builders of society are middle-class shopkeepers selling imported rubbish at a markup, landlords watching their assets appreciate while they sleep, and “entrepreneurs” who invent apps that enable low-wage drivers to deliver pizzas faster than ever before.
Meanwhile, teachers, nurses and aged care workers are considered expensive burdens. People who build or assemble things are expendable. But someone who owns seven Airbnbs and spends weekends listening to podcasts about “passive income”? Apparently, they are the backbone of civilisation.
Forget climate protesters or students who stand with Palestine, the aspirations and virtues of youth are represented by the “40 under 40”—spoiled little investment goblins and entrepreneurs—who penned a courageous open letter to the government. Self-described “female founders” have done the same. Underpaid women workers, single mums and pensioners are irrelevant; it is these repugnant girl bosses who hold the torch for women’s rights, apparently.
Those who use their families and trusts to avoid tax and ensure their offspring never work a day in their lives are hailed as paragons of family values. In the moral universe of Australian capitalism, these are the people treated as the embodiment of the ANZAC spirit. The bedrock of the nation.
And let’s not forget, the same people screeching about their right to be parasites are often the same ones bleating about migrants having the audacity to access public health services, the same ones saying migrants should be deported, the same ones who defend wars and military spending and demand that working-class people sacrifice for the nation.
This tantrum by the entitled is yet another demonstration of the growing confidence and mobilisation of the Australian right. Like all serious right-wing campaigns, it's not led by the average small business owners but by their capitalist backers: conservative media commentators, right-wing parties and sections of capital tied to property and agriculture. Nationals leader Matt Canavan and the agribusiness lobby have been out in force. The outrage machine is whipping up the bases of One Nation, the Liberals and the Nationals alike.
The Liberals in particular are having a wonderful time. As a distraction from their humiliating internal and existential crisis, they are able to play one of their favourite sports with gusto: defending rich people from the horror of mild taxation.
It allows them to hark back nostalgically to the Howard years—the golden age of property speculation, tax concessions and effortless wealth accumulation for their social base. The Coalition can once again present itself as the party of “good economic management”, meaning excellent conditions for bosses, speculators and parasites.
The Liberals initially seemed somewhat surprised by the force of the reaction against the ALP. Opposition leader Angus Taylor dedicated his budget reply speech to outlining more fascistic policies towards refugees and migrants, only to realise a few days later that he could jump on the anti-working-class economics bandwagon as well. It’s been a great week for conservative politics—filled with all their favourite activities. Taylor even found the time to get in a good bout of trans bashing.
Labor, too, appears taken aback by the ferocity of the backlash.
The government did its homework before the budget, leaking changes in advance and reassuring its capitalist friends that nothing dramatic was happening. But Labor underestimated how fiercely Australia’s privileged layers defend their unearned entitlements.
And while the outrage campaign is being driven by the ideological right and its media apparatus, the broader ruling class is perfectly happy to join in. Not because profits are under threat, but because it enjoys reminding Labor who is really in charge. The message is simple: “We’ll tolerate you while the right sorts out its crises and because we cannot yet countenance a One Nation led coalition government. But don’t step out of line.”
The irony is that many ordinary people actually support the reforms. Polling shows more support for changes to the capital gains tax and negative gearing than opposition. But workers don’t own the newspapers. They don’t have millionaire columnists screaming on breakfast television every morning. And Labor has given them very little reason to passionately defend either the government or the budget.
Why would they?
Labor is at pains to display its loyalty to the “aspirational” in our society, to defend its budget on the grounds that it is a) not an attack on the wealthy and b) an attempt to get more people onto the housing market ladder rather than delivering housing justice.
Workers will not directly gain anything substantial from these tax reforms. And they are going to continue to be punished by the full tilt ruling-class offensive underway (benignly labelled the “cost-of-living crisis”) that the Labor government will continue presiding over.
Let’s be clear: workers are the ones being stolen from. Every day, they are exploited by bosses—every cent in profit is gained through the exploitation of workers. In addition, workers are paying more taxes overall and will continue to do so. They pay income taxes, then a 10 percent tax (the GST) on pretty much everything consumed, plus a range of charges like copayments at the doctors, water and council rates for those who own their house—and skyrocketing rents to landlords for those who don’t—road tolls, public transport charges to private operators, the list goes on.
Moreover, real wages are going backwards, and public services are crumbling. Labor refuses to confront the supermarkets, developers, energy corporations or banks engaged in a mass looting operation of the population. The government treats cost-of-living relief as if it were distributing wartime rations. They say, time and again, that inflation and its effects are beyond their control.
So most people are understandably cynical and disengaged.
The broader political picture matters here. Australia is moving further to the right. Racism is intensifying. The far right is growing. One Nation continues consolidating support. Economic insecurity is growing and society is fragmenting.
Meanwhile Labor’s governing strategy has been breathtakingly uninspiring: do as little as possible while faithfully serving empire and business. The government has boosted military spending, backed the US alliance at every turn, supported Israel politically, protected fossil fuel profits and ensured the unions remain firmly sedated.
At the same time, Labor attempts to maintain a thin progressive veneer through symbolic gestures and tinkering: the Voice referendum, recognising Palestine statehood while backing Israel’s genocide, criticising One Nation’s racism while preserving the policies that fuel racism in the first place.
And whenever the right really starts screaming, Labor crumples.
The antisemitism royal commission is a perfect example. The government never wanted it, but capitulated after the right whipped itself into a frenzy. Now, Labor politically owns a grotesque witch hunt aimed largely at smearing Palestine supporters and the political left.
This is the essential truth about Labor governments: they occasionally nibble around the edges of inequality while administering capitalism in the interests of the rich. They are not going to stop the rise of the right because they defend the very system producing the anger, alienation and despair that the right feeds upon.
And yet the unions, the liberal papers, many NGOs have folded in behind Labor—defending them because they are under heat. The Australian Council of Trade Unions’ budget response statement is a disgrace to anyone who considers themselves a fighter for our class. What they should be doing is applying a blow torch from the left: demanding wage rises, public spending and welfare increases.
The task of fighting the right falls to the socialist left, to workers and to social movements willing to confront the wealthy parasites currently throwing tantrums over losing the tiniest sliver of their tax privileges.
No reorganisation of the tax system will shift the balance back. We need to see a revival of genuine class struggle. We need to match, and better, the class war being waged by the right. The terrible decline of strikes, made worse under Labor state and federal governments, is why the rich have gotten away with almost unprecedented levels of daylight robbery for so long.
Because if this budget proves anything, it is that Australia’s rich are just incredibly spoiled. It would be great if the end of this story could be written by Roald Dahl. Unfortunately, we are just going to have to do it ourselves by having a revolution to overthrow the lot of them.
