Which side are YOU on? The following article was published in "The Guardian", newspaper of the Communist Party of Australia in its issue of Wednesday, June 8th, 1999. Contact address: 65 Campbell Street, Surry Hills. Sydney. 2010 Australia. Phone: (612) 9212 6855 Fax: (612) 9281 5795. Email: <[EMAIL PROTECTED]> Webpage: http://www.peg.apc.org/~guardian Subscription rates on request. ****************************** By Anna Pha The capitalist's pursuit of profits and accumulation of wealth knows no limits. As the richest of the rich amass personal wealth almost beyond the imagination, almost one third of Australian households are struggling on an income of less than $20,000 a year. The "Business Review Weekly" reports media magnate Kerry Packer as asking business friend Sam Gazal how much he really needed each year to live on ("BRW", May 28, 1999). Gazal said $200,000. "I'm the same", said Packer. "I'm a simple bloke, I only need a couple of hundred grand a year." Packer's son James apparently fell over laughing at this. "Try $105 million, like last year", James suggested to his father. "BRW" estimates Packer's net personal wealth at a minimum of $6.4 billion putting him at the top of the 1999 "Rich 200" list. (Murdoch is not included because of his US citizenship.) The 1985 "Rich 200" list, put Packer's wealth at $200 million. In 14 years his wealth has multiplied by more than 3,000 per cent, far outpacing a corresponding rise in the Consumer Price Index of less than 60 per cent. Packer is not the only billionaire whose fortunes have rocketed in recent times. Frank Lowy, No 2 on the Rich list with an estimated $2.6 billion, could only boast of $90 million in 1985. Much of his capital is invested in shopping centres -- Westfield Holdings in Australia and a number of outlets in the USA. Investment banker David Hains, with an estimated $1.27 billion, has interests is racehorses, with studs (Kingston Park) in Victoria and others in the USA. A number on the Rich list have accumulated their millions from interests in the retailing sector: Solomon Lew from Coles Myer, Gerry Harvey of Harvey Norman, Boris Liberman from Chain Reaction fashion stores, John Gandel in shopping centres and, before its sale, the Sussan chain. A number are into property development such as Harry Triguboff with his Meriton Group, others into technology, telecommunications, mining or the rural sector. Their investments are wide and many. Their businesses and the other companies in which they hold substantial shareholdings have, on average, been doing very well. The combined accumulated assets of the Rich 200 rose by a total of $21 billion in the past three years -- almost 60 per cent. Strong profit growth, a steady stream of dividends, a booming stockmarket, along with takeovers and mergers have all contributed to the enrichment of these capitalists. Source of wealth What is the source of Packer's wealth? Did he make it himself? "BRW" reports that he paid himself $962 million in dividends from the family's Consolidated Press Holdings (CPH) over the past 12 years. What did Lowy, Hains, Harvey, Triguboff and the others do to become so wealthy? There are some "rags to riches" stories, but most of these rich inherited wealth. A few married wealth. They used it to invest in shopping centres, housing projects, banks, the media, mining, and made money in takeovers. Some traded in shares and other more speculative activities such as on foreign currency exchange markets. Through these activities they accumulated more wealth but they did not actually create new wealth. It is the employees in their enterprises and other workplaces who through their labour created the wealth. The full value of wealth created by workers -- the value added -- during production is not passed on to employees. A small part of this value is paid to the workers for their labour, but the remainder, what Marx called "surplus value" (profit) is creamed off by the large shareholders and the top executives of the enterprises. Packer, "the great accumulator", as <MI>BRW" called him, does not work a printing machine or write the articles for his press. Triguboff does not labour on a construction site nor does Solomon Lew make the toys his company sells. Nor does Gandel add to his fortune by selling lingerie on a shop assistant's wage. These men do not work to produce anything for society. Their riches are derived from the exploitation of workers, the unpaid labour of workers which they cream off because they own the enterprises that make the products and the products when they are made. They have an insatiable lust to accumulate more capital to develop and buy up additional operations to exploit more workers and make more profits to accumulate more capital.... Packer has made hundreds of millions at a time trading in shares, buying and selling TV stations, newspapers and other businesses for a profit. But he does not create one new dollar of wealth for society in the process. It is all for his own pocket. Stepping up exploitation Over the last 15 years workers have been subjected to an offensive by the capitalist class to raise the rate of exploitation of workers. First, wages were restrained. Then wage rises were made conditional on giving back conditions and accepting job losses. Limits on overtime were lifted and then penalty rates were whittled away. The use of casual labour and subcontractors spread while the working day for those in full-time employment became longer. Penalty rates and shift allowances were abolished. This process was well under way under the Labor Government's industrial policies. The attack intensified with the Coalition Government's Workplace Relations Act, giving employers new weapons to fight trade unions and workers and take back more conditions and reduce wages. The stripping of awards and the push for individual contracts and non-union enterprise agreements and now the GST, are central to that process. Workplace Relations Minister Peter Reith's second round of anti- union laws, his legislation for unfair dismissals and youth wages are all designed to drive more workers into job insecurity and low income brackets and give employers the freedom and flexibility to mercilessly exploit workers. "Never forget the history of politics. And never forget which side we're on. We're on the side of making profits. We're on the side of people owning private capital", said Peter Reith to a business lunch in Perth in July of last year. As new heights of productivity (output per worker) are achieved, particularly with the use of new technology, the real cost of labour is decreasing and employers are creaming off larger and larger profits. As a consequence workers are left with a smaller share of the value they have created in production. The distribution of wealth in society is becoming more and more unequal. There is an ongoing high rate of unemployment, with a new strata of "working poor" struggling to survive on low wages. This rise in the rate of exploitation of workers is the real source of the rapid growth of wealth amassed by the likes of Packer and the big corporations. The assets of the top 1,000 companies in Australia have more than doubled from $932 billion in 1993 to $2,151 in 1998. (IBIS, "BRW", Oct 22, 1998). "BRW" reports that in the six years since 1993 the number of millionaires shot up from 71,700 to 208,000 and their share of wealth has gone from 11.1 per cent to 23 per cent of the total. At the same time one third of Australian households struggle on an income of less than $20,000 a year. Corporate welfare The taxation system is another means of redistributing incomes. The likes of Packer, Hains and their mates employ the top lawyers and accountants to evade income, corporate and capital gains taxes. Packer has avoided hundreds of millions of dollars of taxation, with some noteworthy victories over the Taxation Office in the courts, helping to inflate his $200 million to $6.4 billion in just 14 years. "BRW" cites Hains' sale of a mare, believed to have been bought for $50,000. It was later sold for $650,000. The Taxation Office was defeated in the courts when Hains objected to the profit being included in his tax assessment! With wealth comes the power to influence governments, manipulate public opinion and electorates, and to virtually make the rules. Lowy, for example, is a member of the Reserve Bank Board. It is not surprising that instead of legislation to tax capital gains the Coalition Government serves its big business patrons by presenting a tax on people's consumption of the necessities of life. The GST will not hurt the likes of the Rich 200, but it will be very painful for the exploited workers and those in households on less than $20,000. The GST is another means of transferring wealth from workers and the less well off to those with high incomes. On one side of the coin are tax cuts and tax evasion, on the other side are government cuts to social spending on public hospitals, dental services, public education, aged care, child care, student assistance and welfare benefits. This obscene transfer of wealth from the poor and disadvantaged to those on high incomes and with vast amounts of accumulated wealth is going to further increase. But this is capitalism at work. Throughout the world more and more people are being impoverished and thrown out of work. Some three billion people, that is half the world's population lives on under two dollars a day. That's how the likes of Packer and the capitalist class get their wealth. (United Nations figures). This criminal system must be brought to an end. The wealth of these parasites has to be taken from them and returned to the workers who made this wealth. Let the workers arise and liberate themselves from this immoral system and build a new world order in which those who do the work and do the building get the full value of what they create. The Guardian 65 Campbell Street, Surry Hills. 2010 Australia. Email: <[EMAIL PROTECTED]> Website: http://www.peg.apc.org/~guardian -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
