This article was originally published at michaelwest.com.au
Last Tuesday, before the National Press Club, Social Services Minister Christian Porter unveiled a PwC report that put Australia’s “future lifetime welfare cost” at $4.8 trillion. No matter that they confected the highest number they possibly could to scare the daylights out of people — when it came to those dastardly welfare bludgers, the die had been cast.
The Murdoch press and the TV ran long and hard with welfare bludger stories. The narrative was in train. It was lifters and leaners all over again. All that was needed was the imprimatur of a Big Four accounting firm to ennoble the assault on poor people.
This is not to say welfare reform should be ignored. There is fat in the system, and entrenched welfare dependency that passes from generation to generation. But there is more fat elsewhere.
When it comes to leaners, look no further than PwC itself, which has picked up $759,736,134.06 over the past 10 years from the Commonwealth. That’s almost $760 million in taxpayer money for doing reports — providing advice, paper shuffling.
Let’s not forget Ernst & Young, which banked $525,064,685.80 for writing stuff, and Deloitte with its $415,773,994.86, the lowest of the Big Four leaners but nonetheless a leaner par excellence.
It is KPMG though that takes first prize in the corporate welfare stakes, strapping on $934,351,772.48 of the taxpayer’s finest, clipping almost $100 million a year, leaning like a test rugby pack.
All four have been big donors to the major political parties. All four are the architects of global tax avoidance. All four, while sermonising to government on tax policy, are busy advising their multinational clients how to skulk out of paying tax.
If there is a welfare system out of control, it is the corporate welfare system. The “future lifetime welfare cost” — to borrow PwC’s frilly metric — of the Big Four’s tax chicanery dwarfs the cost of those darned dole bludgers. We might as well just independently estimate it at a gazillion right now … on a PwC “future lifetime” basis.
Others have fairly made the point that there is some good stuff in this report, and surely there is. It’s just that the double standard at play is so profound that it is hard to take seriously.
As George Rozvany, former Big Four tax lawyer and head of tax for insurance giant Allianz Australia, pondered this week, “What made PwC such an expert on welfare bludgers anyway? Maybe somebody at PwC knows somebody who has a relative on welfare, or they might pass one on the way to lunch.”
Another annoying thing about the welfare narrative, not the PwC report per se, is that it bundles up aged pensioners, families and the disabled in one swoop. The messaging, whether intended or not, is that if you are a pensioner, you are a bludger, too — an old bludger.
Looking at the actual numbers, rather than a “future lifetime” number, the social security budget this year has the aged at $63 billion, families at $37.6 billion, the disabled at $33.4 billion and the unemployed at $10.5 billion.
Clearly, old bludgers, family bludgers and disabled bludgers are far more egregious bludgers than those garden-variety dole bludgers.
A couple of points on the Big Four corporate welfare figures: these are Commonwealth figures only. We are yet to get to the states. Stay tuned. It is a frightening proposition.
The federal statistics are available through the Australian government’s procurement information system. Through the online application Austender, published Commonwealth contract notices can be searched. We did a search by Australian Business Number of all contracts in the 10 years from September 1, 2006.
The payments to each of the Big Four individually within each contract were then added manually. Unfortunately, or conveniently, depending on your perspective, the website doesn’t provide totals.
The only subsidiary business number that was included in the search was that of Deloitte’s Access Economics. As the Big Four global partnerships operate with multiple associated entities in more than 100 jurisdictions, the actual amounts handed out in contracts over the previous 10 years might be far higher if other entities have been awarded contracts too.
*Michael West is a business journalist. Co-author Geordie Wilson is a student and policy consultant based in Perth. This article was originally published at michaelwest.com.au
Please keep syndicating Michael West’s articles. More of this is needed. Also, is there a reference to George Rozvany’s citation?
So how much did this collection of corporate pond scum pay in tax last year? 2.6 gigabucks with 4 companies? Roll on the revolution.
Politicians and parasitic Corporates
Together, decry
Those they feast upon
Excessively vilify
For were it not; otherwise
the torch of light might
reflect expose
Where all our monies
Really goes!
Re welfare, as opposed to corporate welfare.
I haven’t heard anyone like Porter mention the Job Network’s role in getting people into work. Perhaps because they don’t! I know a young person with mental health issues with a long work history but currently on a DSP after the mental health issues became overwhelming. She would be a whole lot better if she could get a job but needs support to get re-established as her confidence is shot to pieces.
There is no help to get back into work for people in this situation and certainly not from the organizations that receive lots of Government money for this purpose.
Perhaps Porter could ask the Job Network providers to start doing something useful for their money
I’m with JMNO. Take a look at all the outsourced service providers. Used to be done by public servants earning bugger all. Those contracts are worth a fat amount.
Great stuff Michael. The big 4 are a pox on our society. The tax they pay and the tax they artfully avoid for others through Cayman Island accounts would make any 5th generation dole bludger blush.
Dead right Dog’s Breakfast public servants used to do the work at an affordable cost. However, the Coalition has constantly demonized public servants to support their dismissal of them of them to reduce costs, all in the interests of balancing the budget. Or is it in the interests of providing more work for their pals at the Big 4, so they can then cash in on well paid jobs when they leave office.