The disparity of corporate profits and worker exploitation in Australia

In the current reporting period, the Australian corporate landscape has been ablaze with soaring profits. The Commonwealth Bank’s staggering $10.2 billion profit; Coles’ $1.1 billion profit; Woolworths’ $1.6 billion; and the Qantas $2.5 billion record profit, highlight a string of massive financial outcomes. Such buoyant results, however, emerge amidst a backdrop of stagnant wages and heightened cost of living pressures. The juxtaposition of record corporate profits with the struggles of the everyday worker raises important questions about equity and social responsibility within Australia’s economic framework.

At first glance, the surge in corporate profits might seem like a promising sign of economic prosperity; after all, healthy corporate growth often signifies a robust and thriving economy. However, a closer examination reveals a stark reality: the benefits of this prosperity are not evenly shared among the population. The assertion that a “healthy corporate sector is the sign of a healthy economy” must be supplemented with an analysis of how these profits are distributed and how they contribute to the overall well-being of society.

While these profits undeniably lead to gains for shareholders, the majority of Australians do not possess such investments. Roughly 51 per cent of the population does not own shares, emphasising the point that these financial rewards are concentrated in the hands of a relatively small segment of society. This concentration of wealth and power within a privileged few raises ethical concerns about the broader implications for social cohesion and economic inclusivity.

A more disconcerting connection emerges when one considers the contrast between these astronomical corporate profits and the long-standing issue of stagnant wages. Over the past decade, Australian workers have faced limited wage growth, leaving many struggling to keep up with the rising cost of living. This underlying disparity between soaring corporate profits and stagnant wages is reflective of a damaging corporate culture that prioritises shareholders and executives over the workforce that sustains these profitable enterprises.

The call for greater social responsibility from corporations is heightened by the increasingly visible connection between stagnating wages and burgeoning profits. The notion of introducing a ‘super profit tax’ of between 20–40 per cent pushed by unions reflects an attempt to reclaim a portion of these extraordinary earnings for the broader society. While corporations often emphasise their philanthropic endeavours – such as Andrew Forrest at mining giant Fortescue Metals Group – the disparity between their immense profits and the limited nature of their social contributions raises important questions about the true extent of their commitment to social welfare.

As corporate profits continue to climb to record heights, it is crucial to critically assess their impact on Australia’s economic and social fabric. The current scenario paints a picture of inequality and disconnect between the financial elites and the workforce that enables their prosperity. There needs to be a more equitable distribution of corporate gains, as well as the urgency for increased corporate social responsibility.

The tin ear of the business sector

In the face of mounting evidence that the current state of corporate profits is perpetuating inequality, it is imperative to reconsider the existing tax system and its relationship with both individuals and large corporations. Rather than treating taxes as a form of theft – a view commonly espoused by the libertarian right – it is time to reshape this narrative into one that recognises the shared responsibility of all stakeholders, including corporations, in contributing to the welfare of the broader society.

The suggestion that corporate taxes should be lowered during a period of surging profits overlooks the fundamental principle of fairness. The call from the CEO of the Business Council of Australia Jennifer Westacott to lower corporate taxes is not aligned with the present need for equitable wealth distribution. Now is not the time for leniency; instead, it is an opportune moment to harness the unprecedented prosperity of big businesses and channel some of that prosperity back into the community. Hospitals, schools, infrastructure, and various social services rely on public funding, a significant portion of which could be drawn from the abundant profits generated by these corporations.

While the government’s move to initiate a task force under the Australian Competition and Consumer Commission to scrutinise competition in key sectors is a step in the right direction, it is essential to acknowledge that more comprehensive reforms are required to shift the balance of power in favour of the community over corporate interests. The ongoing evolution of the economy necessitates proactive and adaptive strategies that address future challenges while also addressing current disparities.

The recently released intergenerational report by Treasurer Jim Chalmers highlights the long-term demographic and economic shifts that Australia will face in the coming decades. While an aging population and changing demographics pose significant challenges, the report’s implications extend beyond demographics alone. Technological advancements, shifts in workforce dynamics, and evolving social structures will demand a forward-thinking approach that considers the needs and aspirations of future generations.

While Prime Minister Anthony Albanese recently advocated for long-term governance and slower reform, rather than implementing impactful changes in the short-term, the urgency of the present cannot be ignored. The famous adage by John Maynard Keynes, “in the long run, we are all dead,” underscores the importance of finding a balance between visionary long-term planning and responsive short-term action. Striking this equilibrium is a challenge, yet it’s essential to ensure that immediate issues are not sacrificed at the altar of deferred reforms.

The current corporate profits narrative in Australia raises pressing questions about equity, social responsibility, and the future economic landscape. Reconfiguring the tax system to ensure fair contributions from corporations, as well as the utilisation of profits to bolster public services, is essential for addressing the widening gap between corporate prosperity and worker wellbeing.

The ongoing transformation of the economy underscores the need for adaptable, forward-thinking reforms that balance long-term aspirations with immediate needs. The complexities of governance and political dynamics further emphasise the necessity for innovative solutions that prioritise the welfare of the nation over partisan concerns. As Australia navigates the intersection of corporate profits, worker rights, and economic evolution, it is crucial to envision a future that benefits all, rather than a privileged few.