PARADISE PAPERS: Upheaval likely when oppressed pushed too far

OPINION

Crispin Hull

Columnist

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The Paradise Papers reveal what we already suspected: that tax is optional for rich elites. IMAGE: Supplied.

OPINION: THE release of the Paradise Papers in the week of the centenary of the Russian Revolution and in a week when the peaceful leaders Catalonian independence were branded criminals should warn us that history did not end with the coming down of the Berlin Wall in the 1989. The clash between the forces of capitalism-individualism-rentiers vs the forces of communism-socialism-collectivism-labour is alive and just as destructive as it has ever been.

The Paradise papers revealed what we already suspected: that for rich elites tax is optional. Without a good tax base, of course, governments cannot provide reasonable services or basic living to the mass of the governed.

Louise XVI knew the problem only too well. His rentier aristocracy simply refused to pay reasonable taxes. The masses got no bread. They were told to eat cake by the Queen. They rebelled. The royals were executed.

So were Nicolae Ceausescu and his wife in Romania in 1989.

I am not suggesting that we are heading for violent revolution. Rather that when you look through history, time and time again major upheavals occur when ruling elites keep taking and not giving and the broad mass of people feel cheated and exploited.

To return to the French Revolution, just before the reign of terror the Marquis de Condorcet got it right when he referred to “the secret that real power lies not with the oppressors but with the oppressed”.

So many of these upheavals come when to emperors, monarchs, governments (elected or unelected) fail to get enough tax in from the wealthy to distribute across society so the masses do not feel a powerless anger that eventually explodes.

It could be a Roman Emperor, a Russian Czar, a communist dictator, or any ruling elite. We do not know what form the upheaval will take but if the good Marquis is right and people are feeling oppressed or even just feel a seething resentment, the oppressed will exercise their power and cause an upheaval of some sort.

It should be a warning to governments: make sure the wealthy elites pay a reasonable share of taxes so that the broad mass of society gets decent education, health and housing, or face the consequences.

In Australia, those consequences seem to be a voter exodus to anyone but a major party. It is one of the few powers they can exercise in a world in which wages stagnate; CEOs get paid 100 times or more than workers; where big corporations hide unaccountably behind call-centre waiting times; where the price of electricity, water, rates, gas and petty government administrative charges go inexorably up yet we are told inflation is under control; and where people face the daunting choice of waiting endlessly in the public system for “elective” surgery or being duded by private for-profit health funds and huge gap payments.

In Europe, they are flocking to parties on the far right. It is not new. When governments do not get control of their financial systems and exercise that control fairly, populists exploit the resulting resentment as they did in the 1930s.

The lofty idealism of a single European currency has turned into a con trick. The cartels and elites in northern Europe, particularly Germany, have imposed massive austerity programs on the countries in the south and east in the hope they will repay their Euro-denominated debt. But the debt does not get repaid if the debtor is put in the equivalent of debtor’s prison.


Small wonder separatism abounds in Catalonia, Lombardy, Scotland, Britain with Brexit and elsewhere. People want to control their own destiny democratically, even if it means having their own currency which they can devalue as needed to cope with debt, and if that means the local assets of the elites get devalued too, too bad.

If Australia does not do more to rein in evaded tax, it will go the same way as southern Europe.

Don’t get me wrong, capitalism, market economies, democracy and free trade have dragged millions of people out of poverty and given great prosperity to millions more. Whereas socialism and communism invariably end in despotism. But capitalism has to be saved from itself. It has to provide a better balance with wealth distribution; provide better government services; and better targeted infrastructure.

If it does not, another of the Marquis de Condorcet’s secret powers of the oppressed will be exercised: an increasing withdrawal from the consumer society because they do not have much disposable income to spend.

Austerity and increasing inequality will only make that worse, as this week’s second consecutive quarter of declining retail sales spending attests.

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I WAS berated in the letters column this week for accusing the AMA of being secretive with its schedule of suggested fees. Of course, specialists tell individual patients before operations or other services what fees they can expect to pay so they can make an informed decision about whether to go ahead.

But that is not the point. By then the patient is over a barrel with treatment pressing.

The point about why the AMA schedule should be made public is so that people can make an informed choice as to whether to continue with private health insurance while they are still well.

What is the point of private health insurance if you know that the gap between the Medicare schedule and the AMA schedule for a whole lot of services that you might need is going to be so big you will not be able to afford them and have to reluctantly resort to the public system and its waiting times anyway.

People cannot make that informed choice unless they know the likely gap before they get sick.

At present they are blindly cowed into taking out private insurance which they might not be able to afford to use.

The ACCC should have a good look at the AMA schedule so see if it complies with the letter and spirit of competition law and either authorise in the public interest which means publishing it, or striking it out.

To say that the schedule should not be made public because it is too complicated and cannot be directly compared with the Medicare schedule is just plain condescending.

www.crispinhull.com.au


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