Financial Review Rich List 2017 and Twiggy Forrest's 'philanthropy'

By | | comments |
Anthony Pratt (screen shot via @7NewsMelbourne).

The 2017 Rich List is out and no amount of "philanthropy" from those who pay little or no tax can disguise Australia's disproportionate wealth divisions, writes John Passant.

THE Australian Financial Review Rich List for 2017 is out. And fittingly, A Pratt is the winner.

Anthony Joseph Pratt to be precise. His personal wealth is $12.6 billion. Unlike our wages, it has almost trebled in eight years.

Here is how Anthony – don’t mind if I use first names here, do you, Pratty? – described his "win":

"Money is a great scoreboard of success, or one of them."

I much prefer the Biblical injunction, ‘The love of money is the root of all evil …’. Or, as Marx put it: ‘Accumulate, accumulate! That is Moses and the prophets!’ The accumulation of capital – the love for money – is what capitalism is about. 

Where does this money, the capital, that the Pratts of the world love so much, come from? Capital and its growth and accumulation are built on the unpaid labour of workers.

For most readers, this will spark images of sweatshops. In fact, the insight Marx developed was, to generalise, workers are paid, subject to class struggles around the price of their labour, power, and demand and supply variations, what they need to keep them and their kids fed, housed, educated and so on.

This might, for example, be earned in five hours of your eight hour day of actual labour, or in today’s workplace environment, even more than eight hours daily. The other three or more hours is your surplus labour, which when goods and services are sold becomes, in the hands of the capitalist, profit, interest, rent, dividends, capital gains and so on. 

Now, if you read the AFR you’d see page after page of panegyrics to these wealth creators. It is rubbish.

It is our unpaid labour that is the basis of the wealth the 200 rich-listers have. And what immense wealth it is — $233 billion all up, or an average of $1.16 billion each. The "poorest" person on the list has personal wealth of $342 million.

In 2016, their combined wealth was $197 billion, meaning their wealth has grown 15% (or 13% after adjusting for inflation) in the last year. Compare that to real wages, which are falling. The two are linked.

To give you some idea of the magnitude of these riches, imagine these 200 people owned every single residential property in New South Wales. Yes, that’s right. The $233 billion in wealth of this 0.00001% of the Australian population is roughly equivalent to the dollar value of every house, apartment, and flat in New South Wales, where more than 30% of Australia's population live. 

Of course, the filthy rich do not own all of the residential property market in New South Wales. Many of them make it, according to Peter Martin in the Sydney Morning Herald, from real estate or finance. 

Or, as economists Paul Frijters and Gigi Foster, whom Peter quotes, reported:

'… over 80% of the wealthiest Australians have made their fortunes in property, mining, banking, superannuation and finance generally — all heavily regulated industries in which fortunes can be made by getting favourable property re-zonings, planning law exemptions, mining concessions, labour law exemptions, money creation powers and mandated markets of many stripes.'

Says Peter Martin, Dr Cameron Murray and Peter Fritjers' book, Game of Mates (previously discussed in IA),

‘ … will convince you that seeking favours, be they planning approvals or the right to build casinos or toll roads, is what makes Australia go round.’

Let’s pick one rich-lister at random. Oh, it is Andrew "Twiggy" Forrest. His $6.84 billion comes mainly from his mining company, Fortescue Metals Group (FMG) and pastoral holdings. His wealth doubled in the last year.

Last week, Twiggy gave $400 million to various Twiggy Forrest charities. This amount is less than 6% of his wealth. A group of capitalists and their politicians, Turnbull and Shorten, were there, singing his praises.

Labor leader Bill Shorten, in his effluvium and with a straight face, cited Martin Luther King asking what he thought was the most important question in life: "what are you doing for others?"

Shorten went on:

"There can be no doubt that Andrew and Nicola and (their daughter) Grace have answered this question in a most Forrest-like fashion."

There can be and is lots of doubt, Bill. 

Firstly, the $400 million is tax deductible. That means if the Forrests do claim the donations, we will be funding it to the tune of the top marginal rate, 45%, plus the Medicare levy of 2% and, until 1 July, the 2% budget repair levy — 47% or 49%, depending on when he makes the donation. This is almost $200 million in reduced revenue for the government.

Second, look at where the money is going:

  • $75 million coordinating world cancer institutes to eliminate deadly cancers;
  • $50 million to "build stronger communities";
  • $75 million for higher education and breakthrough research;
  • $75 million to "give every child their best chance";
  • $50 million to "create equal opportunities for all Australians"; and
  • $75 million to end modern slavery.

Instead of relying on the whim of rich individuals, aren’t these things (assuming there is substance behind the feel-good statements) that the community, in the form of government, should be funding?

It is no accident, too, that as the government has retreated from these areas under the charm of neoliberalism and restoring company profits, through company tax cuts, for example, there have been demands for increased "philanthropy" from the very rich.

Such largesse is a poor substitute for community. It is not transparent, it is a fraction of what the government could fund and it is directed by the interests of the very rich. This philanthropy is neoliberalism writ small.

Between 2003 when it was formed, and 2011 at least, FMG paid no income tax. In 2014/15, according to the ATO CorporateTax Transparency report, FMG had a turnover of more than $9 billion, a taxable income of just $208 million and paid income tax of – wait for it –  $13 million. Someone with a company paying little or no tax can afford to give away hundreds of millions. For us as a community, a better way than waiting for Fortescue to give a little back might have been for his company to pay income tax, or in recent years, more income tax. 

Forrest’s iron ore and pastoral wealth are built on stolen land. Not only that, but Forrest was the driver behind the introduction of the not quite cashless welfare card — first experimented on Indigenous Australians as the even more restrictive, basics card. That basics card arose in the context of the racist Northern Territory Intervention.

Forrest’s dealings with Indigenous Australians about his mines and compensation on their land are controversial. 

As Michael Woodley, the CEO of the Yindjibarndi Aboriginal Corporation (who have been in conflict for eight years with Forrest’s company, FMG over what constitutes fair compensation from the site) says about the $400 million in donations:

"If it wasn't serious you'd be laughing about it … because this is a kick in the teeth to the Yindjibarndi people. Giving $400 million away from the country that he's mining, which belongs to the Yindjibarndi people and other traditional owner groups, as well around the Pilbara."

Forrest is not alone. The 200 rich-listers are not wealth creators. Their businesses are built on stolen land, and their income and capital is stolen labour.

Read more by John Passant on his website En Passant or follow him on Twitter @JohnPassant.

Signed copies of John Passant’s first book of poetry, Songs for the Band Unformed (Ginninderra Press 2016) are available for purchase from the IA store HERE.

Creative Commons Licence
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License

Monthly Donation


Single Donation


Support equality. Subscribe to IA today.

Recent articles by John Passant
POEM: Together we must

Together we must   HE was three years old You killed him And 50 others ...  
Morrison Government takes fearmongering to another level

It was just another week of lies from the Morrison Government.  
Coalition ministers abandon the sinking ship

With news of yet more ministers retiring at the forthcoming election, it’s ...  
Join the conversation
comments powered by Disqus

Support IAIndependent Australia

Subscribe to IA and investigate Australia today.

Close Subscribe Donate