I am indebted to the anonymous reviewers of the manuscript and to Christina Brian and her team at Palgrave Macmillan. This book also benefited greatly from the stimulating research, teaching culture, and
friendly environment at the Centre for Peace and Conflict Studies (CPACS), University of Sydney.
Struggle for Democracy
Abstract Australian democracy is largely defined by the character and function of the country’s political economy incorporated in the existing neoliberal corporate security state. Violence is built in a hegemonic order characterized by the concentration of private power and wealth, the commodification of people and nature, the construction and manipulation of antagonisms and enemies, and the politics of fear as a US client state. Australian politics is conducted as a one-party state, a new authoritarianism by privileged elites. Democratization requires a clearly defined opposing hegemonic order, a radical democracy, and a counter-culture to the existing one. Its potential exists in progressive non-violent movements, parties, unions, and other formations struggling for a new political economy based on social, economic, and political equality. Keywords Political economy • Neoliberal corporate security state • Systemic violence • Radical democracy • Counter-hegemony • Equality
What is the purpose of Australia? Australia, like other nation-states, is the site of a political struggle over equality: the social, economic, and political equality of its citizens. The core of this struggle is about the nature of democracy and the role and function of the country’s economy, in other words, the purpose of the Australian economy, how should it be organized and why, and for whose benefit?
AUSTRALIAN POLITICAL ECONOMY OF VIOLENCE AND NON-VIOLENCE
Australia’s neoliberal corporate security state is a hegemonic order backed by both mainstream political parties.1 Both have transferred considerable public power and wealth to corporations and wealthy private interests. Under their governance, political and economic inequality has considerably increased. Thomas Piketty’s study on capital shows that in Australia and other western countries, an increasing share of economic growth has largely benefitted the upper classes (Piketty, 2014a, 2014b).2 In turn, the growing concentration of capital and wealth controlled by corporations and wealthy private interests directly and increasingly influences the nature of politics, contracting the political process and politicians to serve their interests. In other words, private wealth and power eventually captures and dominates the state apparatus and disempowers citizens. Systemic violence is built in growing political and economic inequality because it leads to the expansion and proliferation of conflict and violence in society and the militarization of social life. Australia’s political economy is an integral part of the American imperial project for a neoliberal free-trade global economy backed by military power. This world order system is flawed because it increases global economic and political inequality and leads to violent resistance and challenge to western hegemony. As a result, Australia is increasingly involved in military intervention overseas and in the use of violent means to confront political upheavals, rebellions, and situations which are viewed as threats to the national interest and to the American imperial project. Australia’s role in the ‘war on terror’ furthers entrenches domestic violence and the militarization of Australian society.3 Democratization requires a clearly defined opposing hegemonic order, a counter-culture to the existing one, based on a political economy of social, economic, and political equality.4 The Australian Labor Party (ALP), which has traditionally been at the forefront of progressive social, economic, and political reforms in the past, no longer fills that role. With the 1983 election of the Hawke government, the ALP became another major spear-carrier for neoliberal capitalism in Australia. The outcome is a one-party state doing the bidding of corporations and wealthy private interests allied with a national security state engaged in the ‘war on terror’ and the military imposition of a US-led world order.5 This new form of authoritarianism requires the constant manipulation of morality to manufacture consent about the benefits of economic growth and the verity of the mantra that there is ‘no alternative’ to the one-party state, and to legitimize a US-dominated neoliberal globalization.
Australia’s neoliberal corporate security state represents the emergence of a post-democratic order, a reversal of democratization by a new form of authoritarianism to discipline bodies and minds to the demands of the dominant ideology of market relations, while the state neutralizes dissent and militarizes civil society with a new history of Australian wars for freedom and democracy. The central proposition of Australian new authoritarianism is captured by Colin Crouch when he writes that ‘politics and government are increasingly slipping back into the control of privileged elites in the manner characteristic of pre-democratic times, and that the one major consequence of this process is the growing impotence of egalitarian causes’ (Crouch, 2008:6). Australian political economy is not compatible with democracy because it is essentially a political project of class power to disempower ‘labor relative to capital, adopting policy measure such as privatization in order to enable further capital accumulation and institutionalizing wealth, privilege and power within the upper-classes without cease’(Harvey, 2013:5). Democratic politics in Australia cannot survive without what Chantal Mouffe calls ‘the agonistic struggle’, a confrontation between adversaries, not a competition among private elites and between leaders of the ALP and the Liberal Coalition. The struggle must be between opposing hegemonic projects, says Mouffe, ‘which can never be reconciled rationally; one of them needs to be defeated. This is the real confrontation but one that is played out under conditions regulated by a set of democratic procedures accepted by the adversaries’ (Mouffe, 2002:10). Democracy is work in progress; it exists as a vision of the common good and a better and more peaceful world. Democratization, Mouffe would argue, requires ‘confrontation between democratic political positions’. An unwritten pact between the ALP and the Liberal Coalition has undermined democracy and constructed a broad macroeconomic consensus to ensure national stability. The outcome has been a major decline in the politics of the left and a rising shift of discontent towards right-wing populism and the passion for xenophobia and war. Mouffe warns that the absence of a democratic outlet, a radical and different hegemony, stops ‘the construction of more democratic, more egalitarian institutions’ and, instead, ‘lays the ground for forms of politics that articulate essentialist identities—nationalist, religious or ethnic—and for increase confrontations over non-negotiable moral values’ (Mouffe, 2013:xiv; 2002:11). The alternative to the existing neoliberal hegemonic order in Australia is a radical democracy, which exists largely in the activities of non-violent
AUSTRALIAN POLITICAL ECONOMY OF VIOLENCE AND NON-VIOLENCE
progressive movements. Social movements have played a major role, ending the ‘white-only’ Australia policy, constructing greater equality between people, and ‘challenging those who abuse power’ (Burgmann, 2003:43). Verity Burgmann’s study on late-twentieth-century social movements in Australia identifies the Aboriginal, the women’s, the green, and the anticorporate globalization movements, and she writes that they ‘sharply highlight the connection between corporate capitalism, racism, patriarchy and environmental degradation’ (ibid.). Early twenty-first-century progressive non-violent social movements in Australia activate for the empowerment of citizens, justice and human rights, and struggle against social injustice and the causes of violence in Australia and in the world. Each incorporates and projects the meaning of the common good in its understanding and vision of democracy and a more peaceful world, and mobilizes passions towards democratic ends.6 Democratization in Australia depends on the advances of these movements and their potential for convergence to succeed in challenging and displacing the existing orthodoxy and political economy of violence. Violence is about human suffering built in the political economy of advanced capitalist societies like Australia. The World Health Organization defines violence as ‘the intentional use of physical force or power, threatened or actual, against oneself, another person, or against a group or community, that either results in or has a high likelihood of resulting in injury, death, psychological harm, maldevelopment or deprivation’ (WHO, 2002:4). In his pioneer studies on conflict, John Burton provides the political economy context of violence when he defines structural violence as ‘damaging deprivations caused by the nature of social institutions and policies…and avoidable, perhaps a deliberate violence against the person or community’ (Burton, 1997:32). Violence is structured in the economic, cultural, and political systems of the nation-state and the world order. At the core of any major structure is power. Power is about control, domination, and exploitation, and is constructed as relations of force because power involves coercion and repression (Foucault, 2004; Heilbroner, 1986). Unequal access ‘to resources, to political power, to education, to health care, or to legal standing, are major forms of structural violence’ (Winter & Leighton, 2001). The link between capitalism and violence is the extent to which capitalism creates inequality, poverty, unemployment, and alienation. Miliband argues that capitalism is inherently violent because it is ‘a system of domination and exploitation; and the fact that it is unable to make rational and
humane use of the immense productive resources it has itself brought into being’ (Miliband, 1991:209). The power of the state is fundamental to capitalism and the embedding of society in market relations. Foucault’s analysis of the construction of the modern European nation-state reflects the imposition of a ‘tight grid of disciplinary coercions that actually guarantees the cohesion of the social body’ (Foucault, 2004:37). Power, Foucault reminds us, ‘is essentially that which represses’, and political power ‘is perpetually to use a sort of silent war to reinscribe that relationship of force’ (ibid.: 16). However, where there is power, and therefore repression, there is always resistance. Relations of force cause suffering, and where there is suffering, there is disobedience and the desire and demand for change. Power and resistance confront each other everywhere, and the struggle is everywhere. Norway’s peace activist Johan Galtung argues that violence should be understood ‘as avoidable insults to basic human needs, and more generally to life, lowering the real level of needs satisfaction below what is potentially possible’ (Galtung, 1996:197). Galtung has argued that violence is ‘the cause of the difference between the potential and the actual, between what could have been and what is…and shows up as unequal power and consequently as unequal life chances’ (Galtung, 1969:168,171). Systemic violence is implied in the level of incarceration of any country, for example. The number of prisoners per 100,000 in 2013 was 60 for Sweden and 143 for Australia (ICPS, 2014). In the case of Australia, systemic violence is the difference between reality and the potential for non-violence. The potential is presented as what is possible for Australia when compared with other advanced capitalist societies, such as the Scandinavian countries, where levels of incarceration are considerably lower (Wilkinson & Pickett, 2010:148).7 What this means is that, unlike Australia, Sweden has made considerable progress in addressing the causes of violence, particularly relating to crime, because it is more egalitarian and, therefore, more democratic than Australia. This is reflected in the rankings of the Global Gender Gap Report, where Sweden ranks fourth after Iceland, Finland, and Norway, while Australia ranks 24th after Bulgaria and Slovenia (WEF, 2014). When people play a meaningful role in the decision-making process about the social purpose of the economy and how to live in terms of the quality of life for all, and share more equally in the well-being of society, they will be healthier and less alienated, and trust others more (Paul, 2009). The task of a critical political economy is to provide an explanation for the violence
AUSTRALIAN POLITICAL ECONOMY OF VIOLENCE AND NON-VIOLENCE
structured in the institutions and political, economic, and social relations of Australia’s neoliberal corporate security state and to identify the processes and mechanisms which cause harm to people and further endanger the prospects for peace in Australia and the region. Democratization, as a democracy to come, should be viewed as a process of empowerment of the citizenry and the struggle against inequality and injustice, and towards a political economy of non-violence.
NOTES 1. Australia’s neoliberal corporate state is a form of corporatism. Corporatism has to do with the fusion of state and corporate power. It is the coming together of the state and corporations to form an ongoing entity collaborating and working closely together to consolidate power in the pursuit of stated goals invariably coming under the rubric of ‘national interests’. Jacques Ellul studied the phenomenon in his work on techniques and technology in the construction of the technological society, which, he suggests, invariably leads to a form of totalitarianism (Ellul, 1964). Technique, he argued, ‘converts spontaneous and unreflective behaviour into behaviour that is deliberate and rationalised’ (Ellul, 1964:vi). In her analysis of the rise of disaster capitalism, The Shock Doctrine, Naomi Klein labels the US political regime as corporatist. She writes: ‘[A] system that erases the boundaries between big government and big business is not liberal, conservative or capitalist but corporatist. Its main characteristics are huge transfers of public wealth to private hands often accompanied by exploding debt, an ever-widening chasm between the sizzling rich and the disposable poor and an aggressive nationalism that justifies bottomless spending on security’(Klein, 2008:15). Corporatism is moving advanced capitalist societies to a new phase in politics, further undermining democracy by morphing governmentality into the management of violence and inequality. This is made possible with the sophisticated tools of surveillance, the accumulation of metadata on society, and the use of algorithms. A data-based approach to governance—algorithmic regulation—is what the Italian philosopher Giorgio Agamben discusses in the transformation of democracy, ‘whereby the traditional hierarchical relation between causes and effects is inverted, so that, instead of governing the causes—a difficult and expensive undertaking— governments simply try to govern the effects’ (Morozov, 2014). 2. Oxfam report that ‘85 richest people on the planet have the same wealth as the poorest 50% (3.5 billion people)’ and that by 2016, the ‘richest 1% would own more than 50% of the world’s wealth’ (Elliott & Pilkington, 2015).
3. The militarization of social life and society is a process characterized by a number of developments such as the militarization of Australian history in the political indoctrination of school children and the general public by means of curricula, media coverage, and public activities; the militarization of the police force in its training and equipment; the waging of the politics of fear to control behaviour and gain consent for a foreign policy attuned to US global military strategy; and the construction of a military–surveillance– industrial complex in support of Australia’s role as a US client state. A recent development which illustrates the process is the emergence in 2015 of the Australian Border Force as the result of the merger of the Department of Immigration and Border Protection with the Australian Customs and Border Protection Service. Its law enforcement arm, with more than 5000 officers in black uniform, has the power to stop and challenge anyone in Australia. Journalist Richard Flanagan depicts the country’s newest paramilitary force as an Orwellian ‘goon squad’ (Flanagan, 2015). 4. Tariq Ali argues that democracy in the West has ‘taken the form of an extreme centre, in which centre-left and centre-right collude to preserve the status quo; a dictatorship of capital that has reduced political parties to the status of the living dead…the convergence of political choices…a new market extremism has come into play. The symbiosis between politics and corporate capital has become a model for the new-style democracies’ (Ali, 2015). A situation where there is no ideological differences between major political parties and a political class competing for the same jobs gives rise to forms of politics articulated by religious, nationalist, or other forms of political identification. In Australia, the loss of vision of the Australian Labor Party, except as an alternate leadership in guiding the neoliberal corporate security state, has led to the emergence of an increasing number of small parties, such as the Palmer United Party funded and headed by the billionaire Clive Palmer, who shares a number of characteristic with the US real-estate tycoon Donald Trump. Ian Buruma, writer and professor of Democracy at Bard College, diagnoses the emergence of ‘Trumpism’ in the 2015 US Republican presidential nomination as a revolt against political elites and explains his popularity as part of ‘a wider phenomenon throughout the democratic world. Disaffected voters are not only turning away from mainstream political parties and following populists who promise to clean out the corrupt elites; they also share a taste for political entertainers, or clowns if you like’ (Buruma, 2015). 5. The national security state is increasingly dependent on subcontracting its activities to corporations, including activities such as surveillance, special operation, and assassination. In the case of the USA, where the process of outsourcing is most advanced, the use of torture in the wake of 9/11 was extensively subcontracted, as revealed by a US Senate report on detention
AUSTRALIAN POLITICAL ECONOMY OF VIOLENCE AND NON-VIOLENCE
and torture conducted by the Central Intelligence Agency (CIA). One contractor was a company formed by two psychologists who received in excess of US$181 million for interrogating and torturing prisoners (US, 2014:11). 6. Chantal Mouffe’s use of ‘passions’ denotes all the strivings and passions in oneself to find an answer to one’s existence, making sense of the social, economic, and political world, and of finding meaning in life. Passions are part of the internal strivings of the self to avoid insanity and suicide. Passions exhibit a survival response to crisis in the living process, demanding adaptation to minimize harm (violence) to oneself and others. Passions in that context are critical in the construction of one’s identity because they play an important role in the expression and resolution of conflicts in one’s relations with others. Conflict is about active hostility or opposition to someone, about something, that requires expression and resolution. One’s relations with others are largely based on unequal power relation; all individual relations in society are political and require political resolutions. Therefore, it is critical that passions be mobilized towards democratic designs. This requires activism and engagement on the part of the individual in politics. The danger is for passions to be mobilized and diverted away from the political by market forces, greed for more goods and services, and dependency on drugs. Another danger is the capture of passions by nationalistic and patriotic propaganda to hate and kill ‘others’. Sociologist Zygmunt Bauman warns of the danger of the rise of the politics of fear and of the hidden possibilities in modern society for another holocaust (Bauman, 2005). 7. Nordic countries are more equal in the distribution of income and wealth, more peaceful, and their standard of well-being and sense of social solidarity are considerably higher than for most countries (Paul, 2009; Stiglitz, 2012; Wilkinson & Pickett, 2010).
REFERENCES Ali, T. (2015, February 13). How to end empire. Jacobin Online. Bauman, Z. (2005). The demons of the open society. Presentation at the London School of Economics, 20 October. Burgmann, V. (2003). Profit, power and protest: Australian social movements and globalisation. Sydney, Australia: Allen & Unwin. Burton, J. (1997). Violence explained. Manchester, England: Manchester University Press. Buruma, I. (2015, August 11). Trumpism a revolt against political elites. Australian Financial Review. Crouch, C. (2008). Post-democracy. London: Verso. Elliott, L., & Pilkington, E. (2015, January 19). New Oxfam report says half of global wealth held by the 1%. The Guardian.
Ellul, J. (1964). The technological society. New York: Vintage Books. Flanagan,R. (2015, August 31). Australia’s treatment of asylum seekers was bound to lead to something like Border Force. The Guardian. Foucault, M. (2004). Society must be defended. London: Penguin. Galtung, J. (1969). Violence, peace, and peace research. Journal of Peace Research, 6(3), 167–191. Galtung, J. (1996). Peace by peaceful means. Oslo, Norway: PRIO. Harvey, D. (2013). Contesting capitalism in the light of the crisis: A conversation with David Harvey. Journal of Australian Political Economy, 71, 5. Heilbroner, R. (1986). The nature and logic of capitalism. New York: W.W. Norton. ICPS. (2014). Australia. World Prison Brief. International Centre for Prison Studies, London. Klein, N. (2008). The shock doctrine. London: Penguin. Miliband, R. (1991). Divided societies. Oxford: Oxford University Press. Morozov, E. (2014, July 20). The rise of data and the death of politics. The Observer. Mouffe, C. (2002). Politics and passions: The stakes of democracy. London: Centre for the Study of Democracy. University of Westminster. Mouffe, C. (2013). Agonistics. London: Verso. Paul, E. (2009). The political economy of violence in Australia. Journal of Australian Political Economy, 63, 80–107. Piketty, T. (2014a). Capital in the twenty-first century. Cambridge, MA: Harvard University Press. Piketty, T. (2014b). Dynamics of inequality. New Left Review, 85, 103–116. Stiglitz, J. (2012). The price of inequality. London: Penguin. US. (2014). Committee study of the central intelligence agency’s detention and interrogation program. Washington, DC: Senate Select Committee on Intelligence. United States Senate. WEF. (2014). Global gender gap report 2014. Geneva, Switzerland: World Economic Forum. WHO. (2002). World report on violence and health. Geneva, Switzerland: World Health Organization. Wilkinson, R., & Pickett, K. (2010). The spirit level: Why equality is better for everyone. London: Penguin. Winter, D., & Leighton, D. (2001). Structural violence. In D. Christie, R. Wagner, & D. Winter (Eds.), Peace, conflict, and violence. Englewood Cliffs, NJ: Prentice-Hall.
Abstract Privatization of public assets and deregulation of the economy constitute a major transfer of public power and wealth to corporate and wealthy private interests. These have succeeded in capturing mainstream politics, and hence the state, to protect and advance their vested interests. The scale of transfer of public power and assets to the private sector, both domestic and foreign, is a threat to democracy, characterized by growing inequality in the distribution of income and wealth. It results in negative impacts on society and damage to the social fabric, and scarcity in the provision of public services. Growing inequality and corruption undermine political stability and public trust. Keywords Privatization • Corporate power • Capture of the state • Corruption • Disempowerment • Growing inequality • Maldevelopment
A major source of violence in Australia derives from the accumulation of wealth by dispossession by the neoliberal state, because it disempowers citizens by transferring vast amounts of public wealth and power to corporations, mainly foreign entities, and other private wealthy interests such as family trusts and foundations, and many charities, including religious institutions and universities. According to Cahill, Humphrys, and Stilwell, the effect of signing the Accord by the 1983 Labor government ‘was to manage the neoliberal transformation of state and economy by tying the
AUSTRALIAN POLITICAL ECONOMY OF VIOLENCE AND NON-VIOLENCE
leadership of the labour movement to this process’ (Cahill, 2008:326; Humphrys, 2014:175).1 The Australian corporate state that emerged with the signing of the Accord by the Hawke government had a clear agenda of pushing hard for economic growth by deregulating the economy, privatizing public assets, and commodifying everything and everyone (Leys & Harriss-White, 2012; Maddison, 2006). Privatization accelerated with the official end of the Cold War in 1991 when support for socialism collapsed and capitalism spun into a more undiluted and rapacious form of neoliberal capitalism. By 2003, a single corporation, ‘led by one of the wealthiest, most influential and politically determined cultural warriors of the contemporary Right’, gained ownership of some 70 % of the Australian press (Manne, 2010); and large transfer of crown land to the private sector took place, particularly in Western Australia. More than A$33 billion of public assets had been transferred to the corporate sector, including the country’s 22 biggest airports, all public banks, big chunks of Australia’s maritime and land transport infrastructure, and other valuable assets such as the Commonwealth Serum Laboratories and the Australian Defence Industry (ADI). According to accountants Bob and Betty Walker, ‘total proceeds from Australian sales of government enterprises over the past two decades have been some A$118 billion, A$50 billion for the states and $68 billion for the commonwealth’ (Walker & Walker, 2008). Privatization has continued unabated with sales of major public utilities, including Queensland Rail (QR), and the 2014 sale of publicly owned Medicare Private to the private sector for more than A$5 billion, likely to lead to a costly US-style and worse ‘managed-care’ health outcomes, all closely linked to insurance companies, all in the business of providing hefty returns to mostly overseas shareholders. A major instrument of privatization by stealth is the public–private programme (PPP). The PPP is essentially a cover for the perpetuation of corporate interests and power. PPP is privatization by another name and covers a wide range of strategies and assets. The scheme involves government paying private companies to provide, operate, and maintain government facilities such as hospitals, roads, railway lines, and schools. The programme calls for the transfer of government-owned assets on ‘long term contracts up to fifty-four years, revenue guarantees and compensation for future policy changes by governments’ (Hodge, 2003:5). Fundamental to any PPP project is to borrow almost the entire value of any project. Shaoul warned Australians in 2005, ‘[D]on’t touch public-private partnerships with surgical gloves…the UK’s hospital, road and transport
PPPs were forcing up public-sector costs and lining the pockets of the private sector’ (Allen, 2005). Goldberg claimed that the Macquarie Bank NSW toll road projects are not viable without substantial taxpayer subsidies (Clow & West, 2005). He maintains that many major projects will not survive ‘without continuing government subsidies and are likely to fail anyway, leaving taxpayers to foot the bill for billions of dollars in debt… the modelling on which the projects are engineered is to maximise profits to investment banks rather than provide the best possible service for motorist’ (West, 2006). Deregulation of the economy has greatly favoured multinational companies and private capital in their control of the Australian economy. By 2014, most major sectors of the economy were controlled by foreign investment, dominated by Anglo-American capital, with more than 50 % of the stock of foreign investment in Australia. In 2012, the USA was the largest investor, with control over many large companies; it also exercised considerable economic leverage because of sizeable shareholdings in major Australian companies held by powerful US financial institutions such as JP Morgan Nominees and Combined Citicorps (Coghlan & MacKenzie, 2011; Hunter, 2013). They hold major shareholdings in Australia’s big four banks—Commonwealth, National Australia, Westpac, and ANZ— as well as major companies such as BHP Billiton, CSL, Origin Energy, Rio Tinto, Westfield, and Woodside Petroleum. JP Morgan, Citicorp Nominees, and HSBC Nominees also control a substantial investment in the Australian Stock Exchange as well (Paul, 2014:20). Corporate wealth dominates and finances both mainstream parties. Business donations sustain Australia’s political party machine and politics as a lucrative investment in the accumulation of personal and corporate wealth. The situation in Australia is best explained by Thomas Ferguson’s investment theory of politics, which says that ‘elections are occasions on which segments of private sector power coalesce to invest to control the state’ (Chomsky, 2010:32; Ferguson, 1995). Ferguson believed that the state is controlled by ‘coalitions of investors who join together around some common interest. To participate in the political arena, you must have enough resources and private power to become part of such a coalition’ (Chomsky, 2011:137). Politicians are essentially in business for themselves as members of blocs bidding for the support of private wealth and power, and political donations amount to the legal and illegal bribery of politicians and political parties and the gross corruption of the electoral process.
AUSTRALIAN POLITICAL ECONOMY OF VIOLENCE AND NON-VIOLENCE
The Australian electoral process is largely funded by corporations and other powerful and wealthy interests. For the 2010–2011 financial year, the major investors in the Labor and Liberal parties were the Telcos, health, media and public relation, mining and energy, financial services, property development, building, and infrastructure sectors (Williams & Butler, 2012). In the 2011 federal elections, they received some $215 million; tobacco, mining, alcohol, and gambling interests were big givers (Orr & Costar, 2012). In 2012, mining and gambling interests were large contributors to political parties ‘at a time when the government was considering dropping poker machine reforms and fighting off a sustained attack over the carbon tax’ (Greens, 2013; Peatling, Hall, & Hurst, 2013). Both parties received more but undisclosed funding because of major loopholes in the legislation and a weak and under-resourced regulatory regime, exemplified in the Australian Electoral Commission allowing more than 3.2 million eligible citizens not to cast a vote in the 2010 federal election (Costar & Browne, 2010).2 Capture of the state by private power has further enriched corporations and other wealthy private interests in their reliance on tax havens to minimize, if not negate, their tax obligation. Sydney airport, which was privatized by the government, has paid no tax in the last 10 years despite booking more than A$8 billion in revenues during that period (West, 2013a). Transurban, another infrastructure monopoly created by privatizing public wealth with billion-dollar revenues, only paid tax once in recent years (West, 2013b). Recent investigative reports show that most major companies operating in Australia are involved in tax minimization schemes linked to overseas tax havens to transfer most of their profits out of Australia. Almost ‘60 percent of the ASX 200 declare subsidiaries in tax havens…nearly a third of companies pays an effective tax rate of 10 percent or less’ (Aston & Wilkins, 2014). IKEA, for example, earned ‘an estimated $1 billion in profits since 2003—and almost all of it has been transferred tax free to Luxembourg and the Netherlands’ (Chenoweth, 2014b), and Google ‘paid just $74,000 in Australian tax in 2011, despite an estimated $2 billion in revenue from Australian ads’ (Wilkins, 2013). Another giant business, American Express, ‘paid no income tax on its multibillion-dollar operation in Australia for seven years’ (West, 2015a). In the past decades, Apple ‘shifted $8.9 billion in untaxed profits from its Australian operations to Ireland’ (Wilkins, 2015). The US-based Rupert Murdoch’s media empire has ‘siphoned off $4.5 billion of cash and shares from his Australian media businesses in the past two years, virtually tax free’ (West, 2015b).
A report by the Tax Justice Network Australia, “Who Pays for Our Common Wealth?”, suggests that between 2004 and 2013, there was ‘up to $80 billion in tax foregone in that period’ from the ASX 200 alone (Aston & Wilkins, 2014; TJNA, 2014). Tax avoidance schemes have been ‘by the big four global tax advisory firms, PricewaterhouseCoopers, KPMG, Deloitte and Ernst & Young—as evidenced in the recent LuxLeaks scandal’ (West, 2014). According to the Australian Taxation office, ‘more than half of Australia’s trade is money being sent offshore by companies to their overseas arms—with almost a third going to Singapore and Switzerland’ (Khadem, 2015). Many Australia-based business and wealthy private interests have set up businesses and residences in Singapore and take advantage of the island city-state efficient enterprise and tax minimization schemes to shift and hide considerable wealth. In 2015, the Australian Taxation Office referred to some $60 billion in transactions from Australia to tax havens for the 2011–2012 financial year (Aston, 2015). In the case of BHP Billiton, the company sale of iron ore from Australia to China is organized through Singapore and the company ‘paid no Singapore tax on $US5.7 billion in profits reported to its chief Singapore marketing company since 2006, with all the earnings repatriated to a Swiss parent company then to the Netherlands’ (Chenoweth, 2015). It is not surprising that Australian tax collection as a percentage of gross domestic product (GDP) has fallen over the years in comparison with other Organisation for Economic Co-operation and Development (OECD) countries. Frankel makes the point that had Australia followed the examples of the Netherlands, Austria, and Sweden, the country should have collected an additional $175–$280 billion a year (Frankel, 2012:39). The Australia Institute points out the impact of the Howard and Hawke/ Keating governments ‘lowering the top tax rates from 60 cents in the dollar in 1983–1984 to 45 cents in the dollar today’, and suggests that ‘the cumulative cost of the income tax cuts introduced by the Howard and Rudd government since 2006 are more than $170 billion’ (Friel & Denniss, 2014:13). More tax could have been raised had the Australian government not succumbed to the mining lobby at the height of the mining boom. As a result of the tax concession given to the well-off during the Howard years, the federal government lost $169 billion in revenue. According to Richardson, Denniss, and Grudnoff, ‘of the $169 billion in tax cuts, 42 percent, or $71 billion, went to the top 10 percent of income earners, the top 10 percent got more in tax cuts than the bottom 80 percent’ (Douglas et al., 2014; Richardson, Denniss, & Grudnoff, 2014).