Workers know what to do: tax the rich and cap prices

Last month, Treasurer Jim Chalmers fronted the media with a gloating smile to announce the federal government was posting a consecutive budget surplus of $18 billion. “Our bigger than expected surplus in the year just gone is entirely due to lower spending”, beamed Chalmers. “A second straight surplus is proof of our responsible economic management.”

Any normal person observing this “responsible economic management” was probably feeling their stomach turn. We are living through one of the worst cost-of-living crises in generations, and the Labor government has decided to lower government spending rather than increase it in areas that would help the millions of people struggling to make ends meet.

The latest Guardian Essential Poll shows something that socialists have been arguing for the last few years—that most people, when confronted with a lack of affordable housing and rising electricity and grocery prices, think that the government should intervene to make things more affordable. Seventy percent of survey respondents thought that price caps should be introduced on rent, groceries and electricity bills, and the same number thought that the rich should be paying more tax.

Seventy-one percent of respondents agreed that the gap between the rich and poor is widening. According to the latest poverty and inequality report from the Australian Council of Social Services, one in eight people in Australia are living in poverty. With rising costs, this number will only increase.

The latest CoreLogic report from September found that rents had increased by 7.2 percent since last year. These increases are not uniform across the country. In Melbourne, it was working-class suburbs like Dandenong (16 percent) and Broadmeadows (14 percent) that went up the most. The same is true for New South Wales, rents in Roselands, Villawood and other working-class suburbs increasing by 24-30 percent. The amount of money one must earn to purchase a house in Sydney is eye-watering—only those on nearly $300,000 could purchase a property at the median value without incurring mortgage stress (this is $200,000 more than the average annual income), according to financial comparison site Canstar. Unsurprisingly, only 16 percent of people are opposed to removing tax breaks for property investors, according to the Essential poll.

Wages haven’t gone up to compensate for rising prices. In fact, the latest employment outlook from the OECD found that wages in Australia have gone backwards by 4.8 per cent compared with pre-pandemic levels. Bosses in Australia have taken advantage of the economic situation, and wealth is rapidly moving from the bottom of society to the top. Corporations like Coles—which posted an annual profit of $1.1 billion in the last financial year—are laughing all the way to the bank.

Many people know this situation isn’t right. Forty percent of respondents to the Essential poll said that our political system needs fundamental change, which rose to 49 percent for those who are struggling or in serious financial difficulty.

Capitalism is always going to produce stark wealth inequality, poverty and anxiety for ordinary people. It’s a system predicated on a class divide in which a minority get rich off the labour of the majority. The bosses and the politicians who represent them clearly have no interest in overturning this state of affairs.

That’s not to say there’s nothing the government could do to alleviate the current financial burdens for millions of people. They just refuse to. The government could raise taxes on companies like Coles and individuals like Gina Rinehart and use that money to pay for public housing. Instead of posting an $18 billion surplus and bragging about cutting government spending, Labor could increase government spending on social services and Centrelink. They could legislate price caps on essential goods and ban greedy landlords from ripping more rent out of young people.

It’s an indictment on the Labor government that they refuse to implement these measures. It’s also an indictment on the union movement that there aren’t more strikes and actions for wage increases.

Ordinary people understand the problems and know what the solutions are. I say we should let them be in charge.