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Tough times for Australian billionaires

Australia wayne swan 2012 03 06
Australian Treasurer Wayne Swan in Canberra, on May 11, 2011. (Mark Nolan/Getty Images)

Tough times for Australian billionaires

Australia's treasurer has accused some of the country's richest citizens of using their wealth to influence national affairs.

BRISBANE, Australia — Billionaires might be able to buy more pretty baubles, but they still only get one vote.

That appears to be what Australia's deputy prime minister was counting on when he attacked some of the country's richest citizens.

The sustained assault by Wayne Swan — aimed largely at outspoken mining billionaires — began a week ago, with an essay in which he warned that "the rising power of vested interests" endangered Australia's success.

The article, published by The Monthly magazine — and the avalanche of responses to it — have dominated public discussion since.

Following the Occupy movement, Australia is now entering the global wealth debate. 

Swan assailed billionaires' efforts to stop a new mining tax, due to take effect July 1. Their well-funded publicity campain led the minority Labor government — rattled by the potential electoral knock-on effect — to water it down. 

The law, called the Minerals Resources Rent Tax, will tax profits in excess of 75 million Australian dollars ($79 million USD).

Initially, in 2010 then-Prime Minister Kevin Rudd proposed it as a 40 percent levy on "super profits" of mining companies. After an infamous "Billionaires protest" and vigorous lobbying, the Labor government ousted Rudd. A watered down version of the tax will fund a range of measures for low-income households, the government has said.

Swan's play

An irate Swan, who is also treasurer, described the influence of "the 0.01 percent" as a "poison" that had "infected our politics and is seeping into our economy." Naming mining magnates Gina Rinehart, Andrew Forrest and Clive Palmer, Swan said vested interests were "undermining our equality and threatening our democracy."

Worse, he wrote, billionaires were undermining the Australian notion of a "fair go" — which dictates that everyone should have an opportunity to prosper. "A handful of vested interests that have pocketed a disproportionate share of the nation's economic success, now feel they have a right to shape Australia's future to satisfy their own self-interest," he wrote.

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His inspiration? The US Republican presidential primary.

"Today, when a would-be US president, Mitt Romney, is wealthier than 99.9975 percent of his fellow Americans, and wealthier than the last eight presidents combined, there’s a global conversation raging about the rich, the poor, the gap between them, and the role of vested interests in the significant widening of that gap in advanced economies over the past three decades."

He continued: "This is a debate Australia too must be part of."

Swan lamented the mining sector's dominance: "The infamous billionaires’ protest against the mining tax would have been laughed out of town in the Australia I grew up in, and yet it received a wide and favorable reception."

His outburst also follows the purchase of a major shareholding of the Fairfax media group by Rinehart, the nation's richest person, which drew protest that the mining magnate was trying to buy a seat at the boardroom table in Australia's most influential stable of newspapers.

The 0.01 percent respond

Perhaps predictably, Swan drew immediate fire from conservatives — who dismissed his arguments as the "politics of envy" and accused him of attempting to incite class warfare.

And on March 6, a laundry list of Australia's leading entrepreneurs lined up to denounce Swan's comments, saying that the country had benefited from the investments of such people as Rinehart, Palmer and Forrest.

Graham Bradley, deputy president of the Business Council of Australia, pointed to entrepreneurship and philanthropy in the US, telling The Australian newspaper: "Were Australia lucky enough to have a Bill Gates or a Steve Jobs or Warren Buffet, I wonder if the Treasurer would be as quick to criticize them. I'm quite certain his American counterpart would never attack those [people] in a personal way but would have held them up as models."

Entrepreneur Dick Smith, who made millions from an eponymous electronics empire, said the people targeted by Swan were "what I would call the ultimate capitalists, and we benefit greatly from having these people."