Posted by John, July 15th, 2010 - under Public services, Social services, Tax, Tax the rich.

Tags: Gillard Government, Gillard Labor

Yes, the upcoming campaign will have strong elements of ‘clean’ and ‘green’ but above all else it will be very lean. There will be hard choices and some unpopular cutbacks…

Prime Minister Julia Gillard at the National Press Club on Thursday

Not only that but for every spending commitment from Labor there will be an offsetting spending cut.

Am I missing something? Last week Gillard cut a deal with the big 3 mining companies to gut the mining tax to such a degree that it will cost us around $14 billion.

Keeping the mining tax in place would have enabled the Government to increase spending on health, education, aboriginal disadvantage and climate change measures. Instead we will be ‘faced with unpopular choices’.

What sort of unpopular choices does she have in mind? Here’s a guide, from Gillard’s speech at the Press Club again.

The sectors which may need renewal and reform are often those that were relatively untouched by the Hawke-Keating reforms – sectors like health and education that meet essential public needs, delivered largely within the domestic economy. Hospitals, aged care facilities, childcare centres, schools, and employment services – all services with a diverse range of providers from the public, private and non-government sectors, and services where competition and value is often held back by jurisdictional red tape and the lack of seamless national markets.

The implication is clear. Gillard will attack public services to continue to fund her largesse to big business.

In all the rhetoric about fiscal rectitude and return to surpluses (code for cutting vital public services) there was not one mention about increasing taxes on the wealthy to pay for better health, education and aged care services and to move society to renewable energy.

In a speech in February Deputy Commissioner of Taxation Jim Killaly said that 40 percent of big business (those with a turnover greater than $250 million) had paid no income tax in the three income years between 2006 and 2008. He also said twenty percent of those companies were actually making accounting profits.

Analysis by Adele Ferguson and Stuart Washington in the 13 March edition of the Sydney Morning Herald showed that most industries actually pay much less than the headline 30 percent company tax rate. For the finance sector for example they found the figure was 20 percent.

In other words almost half of all big business pays no income tax and those that do mostly pay much less than the notional 30 percent headline rate.

A progressive Government would make the tax system more equitable and force all big business to pay tax. It would tax the super profits of miners. It would use the extra revenue to provide more and better services to the poor and working class, not cut them.

Gillard Labor is not that Government.