By Sue Boland
"Crime against democracy" was how the Australian's May 15-16 editorial described Senator Brian Harradine's May 14 decision to reject the goods and services tax (GST) as "inherently regressive". Other newspaper editorials and columnists responded with similarly hysterical comments. Yet just 12 months ago they were lauding Harradine for voting in favour of gutting native title rights and the partial privatisation of Telstra.
Big business's panic at the prospect of not getting a GST has been fuelled by the massive public support for Harradine's stand; his office received more than 2000 messages of support. A May 15-16 ACNielsen opinion poll recorded 58% opposition to the GST, and other polls demonstrate that opposition has remained above 50% for more than six months.
Calmer heads in the media and big business are counselling the government to compromise with the Australian Democrats. They realise, correctly, that this is now their only chance of getting the GST; in a new election, any party supporting a GST would lose.
Big business knows that a GST, even amended by the Democrats, will take Australia further down the path of transferring wealth from the poor to the rich. They also know that once the GST exists, it will be easy to increase the rate, remove exemptions and reduce compensation.
The increase in opposition to the GST reflects a sudden realisation amongst the general public that it is still possible to defeat the GST. Those on whom the GST will have the biggest impact have been sidelined from the debate, rendered passive bystanders by the lack of organised public demonstrations against the GST.
Dishonest compromise
Senator Bob Brown, leader of the Australian Greens, has challenged the Democrats to reject the GST. However, in making it clear that they will assist the government by allowing an amended GST through, the Democrats have sided with big business against the majority of people, just as they did when they passed Peter Reith's Workplace Relations Act in 1996.
Even before Harradine had rejected the GST, the Democrats began sliding down the slippery slope of compromise to make their agenda more palatable to the government and big business. In April, they backtracked on their election campaign commitment to exclude food from a GST, saying that they would now exempt only "basic" food. This new position means that all restaurant meals, takeaway food, "junk food", vending machine food and prepared food would attract a GST.
After Harradine announced his decision, the Democrats said that food and diesel tax were their "bottom line" and the rest of their proposals were negotiable. In other words, the Democrats are prepared to abandon their policies of exempting public transport, widening the education exemption to include adult and community education and all school activities, and widening the health exemption to include over-the-counter medicines and natural therapies.
Just days later, Democrat leader Senator Meg Lees was quoted in the press as saying her party also had "room to move" on the diesel fuel rebate and income tax cuts.
In order to demonstrate their compliancy, the Democrats have told Prime Minister John Howard they are "willing to work within the existing legislative" framework; that is, they have agreed to the government's June 30 deadline for voting on the GST.
The government, and the Democrats, want the GST voted on before the Review of Business Taxation recommendations are released on June 30 and the public realises that the GST's purpose is to pay for big tax cuts for business.
In the May 19 Australian, Lees is quoted as saying, "We want a fairer tax system and one that strikes a balance between economic, social and environmental imperatives". But it is not possible to have a balance between economic (i.e., big business) and social and environmental imperatives.
A tax system which is "fair" to people on low incomes is not supported by big business because it would eradicate indirect taxes, adjust income tax brackets to allow for wage increases, increase company tax and increase tax on wealthy individuals.
Big business wants the lowering of company tax, income tax cuts, an across-the-board consumption tax and a cut in spending on the public health, education and transport systems. The Howard government's tax "reform" proposals are part of that agenda. By deciding to support a GST, the Democrats have decided to support a tax system that favours business at the expense of everyone else. There is no "balance" of interests involved.
People have a right to be very angry at the Democrats for their deceit over the GST. Many people voted for the Democrats in the federal election because they pledged to oppose a GST on food. Most voters didn't anticipate the Democrats slithering out of their commitment in the same slimy manner that Liberal and Labor politicians do all the time.
The Democrats' deceit doesn't end with their change of position. Various Democrat politicians, including Lees, continue to give interviews in which they assert, without any qualifications, their opposition to a GST on food. Because the majority of Australians believe the word food means all food, not just those items that require cooking, many people are still unaware that the Democrats will vote for a GST on a large proportion of food.
Penalising the poor
The Democrats attempt to justify their position by saying that poor people don't eat out or buy prepared food, and that they should spend more time at home cooking. This overlooks the fact that tens of thousands of homeless people and boarding house residents have no stove to cook on. They would pay the GST on almost all the food they eat.
It also ignores the fact that for women — still responsible for the overwhelming majority of housework, including cooking — a GST on prepared or semi-prepared food will mean choosing between food bills they can't afford and exhaustion from overwork.
Lees is quoted in the May 19 Australian as saying, "The social benefits of not taxing food are significant and the need to compensate low-income earners is reduced by 75%". How does she arrive at this figure when, under the Democrats' proposals, there would be a GST on almost all the necessities of life: heating, transport, rent, clothes, many health and education expenses, gas and electricity usage, telephone bills, haircuts, furniture, babies' and children's goods, funerals, postage and a large proportion of food items?
The Democrats' attempt to deal with diesel tax cuts in a way which is "fair" to people in rural areas does not address the problem of rural poverty either.
The government's proposed diesel tax cuts are only for those who own a farm or a business. The majority of people living in rural and regional areas who are unemployed, on pensions, working part-time or on low wages will pay a GST on petrol and diesel in order to travel long distances to get to work, buy supplies or access government services. The benefits of the government's proposed diesel tax cuts, even if amended by the Democrats, will overwhelmingly go to the big mining companies, woodchipping companies and agri-business companies.
None of the reasons for opposing a GST outright are invalidated by the Democrats' preparedness to do dirty deals with the Coalition. If the Labor Party really meant what it says when it condemns the GST in the media, in both houses of parliament and on the hustings it would use its institutional strength to organise mass demonstrations of workers, pensioners, students and the unemployed to stop this regressive tax from ever being implemented.