.. of a consumption tax on food can only worsen the effects a capitalist economy has on Australia’s population. The Warren/Harding modelling (estimate of the impact of the GST) for the Senate Inquiry, confirms this. It shows that keeping food GST-free would make a major beneficial difference for low income households, especially pensioners and low income families. (ACOSS Media Release 13 April 1999). Although Michael Raper concedes that the Government have achieved equity in some areas, he still reiterates that it is not equitable for food to be subject to consumption tax since it accounts for 30 – 40% of all expenditure (not income) of low income families.
This inequity is increased when the assumed income tax cuts the low-income earner will receive under the proposed tax reform package are consumed by increased costs at the supermarket. (ACOSS Media Release 15 February 1999). An increase in the rates of bankruptcy is inevitable under the proposed Goods and Services Tax, in particular for small business operators. Small businesses will have to increase the costs of their goods and services to meet the initial implementation costs of the Goods and Services Tax and to meet the ongoing compliance costs. This will create a loss of business from those members of the public on low incomes who simply cannot afford the increased living expenses. It will also increase the rate of unemployment by forcing the small businesses to reduce their operating expenditure, an expenditure that largely consists of employee wages.
This in turn will leave the small business operator in a vulnerable position in a competitive market place. Big businesses will take advantage of the struggling small businesses and deliberately undercut them, leaving the small business operators no alternative but to close down. This demonstrates that a capitalist economy promotes social stratification and that social inequality is based on the economic organisation of society and the political power to dominate and coerce. (Sargent, Nilan and Winter, 1997, p.216). A perspective adhering to the sociological theory of conflict. The conflict theory is based on the notion that dominant groups use their power to coerce situations to serve their own interests in detriment to subordinate groups.
In relation to Australian society and the current economic discussions, the conflict theory is applicable to and supported by the subordinate groups. The beneficiaries of the Goods and Services Tax demonstrate the alliance of the Government with those of wealth and social influence in Australian society. The introduction of the Goods and Services Tax can only reinforce the existing social inequality therefore creating definite conflict between the classes. In contrast, the ideology of functionalism could be viewed as the perspective of the dominant groups. The theory of functionalism is the necessary dominance of the ruling class over society and according to Sargent et al (1997) in relation to Australia’s current economic climate, functionalism is derived from the philosophy of those who benefit from the power relationships established in Australian society. (p.214).
This ideology is based on the assumption that for society to function effectively it is necessary to support social stratification therefore maintaining the order or status quo. In Australian society, this ideology is instilled through the socialisation process and is an important means by which Australian capitalism controls the ideas of subordinate groups. (Sargent et al 1997, p.214). Although these perspectives are from opposite ends of the spectrum, they both demonstrate inequity is the mainstay of capitalist economies. A key economic objective of the Government is to liberate the potential of Australia’s unique human and natural assets through removing the dead hand of centralised control.
(The Howard Government, 1998, p.11) yet centralised control could not be any more alive than what it is in Australia today. A prime example of this is the limited concentration of media ownership in Australia and its connection with large corporations. The fact that there are so few companies responsible for the commercial media in Australia, and that the commercial media have at least 90 percent of the television and radio audience, means that the general interests they represent dominate. (Bennett, 1992, p.127) The media is a key agent of the socialisation process and therefore has extensive influence on Australian society. To Australian society the media is often portrayed as and believed to be a reliable authority and source of information, responsible for reporting facts in an unbiased and well-balanced manner yet private economic interests own the media.
The institution of the media is corporate business therefore capitalist in its political and economic nature. The power structure of the centralised economic system is what they seek to maintain, therefore the media has excessive political influence and the material that is persuasively conveyed to the public by the media often reflects their need to endorse and uphold the present organisation of power and wealth. (Sargent et al, 1997, p.96). By adopting the conflict approach and applying it to the media and its corporate owners, it is obvious how significant the role of the media is in the maintenance of a capitalist society and for those of power and wealth who benefit. .the media are seen to be owned by dominant classes who use them as a mechanism to serve their own interests.
The media thus come to play a major role in the transmission of ideologies. (Macionis et al, 1997, p.587) This situation is not localised to Australia only, with the development of a global economy the effects of capitalism are significant in societies worldwide. This is demonstrated by the expansion of holdings of powerful tycoons such as Rupert Murdoch which incorporates embracing the free market of countries such as the United States and Europe, therefore increasing the concentration of media ownership and capitalist activities on a global level. This supports an important issue within the conflict paradigm that may be applied to the media and it’s influence on capitalist societies. This issue is the economic base of the media and Macionis et al (1997, p.587) write in particular the ways in which they follow a profit motive, and the ways in which big business conglomerates come to shape them.
These powerful conglomerates control the international media and therefore the media coverage. The media coverage that consistently disregards those individuals on the outside of mainstream society because they lack economic power and.