Kristina Keneally’s Guardian Australia piece on Andrew Forrest’s most recent bout of conspicuous philanthropy bravely steps into territory which is dangerous in Australia: criticism of wealthy people for giving money away. Keneally focuses on the cost to our country of Forrest’s companies’ extensive long-term avoidance of paying their fair share of tax, and Forrest’s personal and vocal campaigning against changes to the taxation system which might impact his profits. She makes the point that had his companies paid taxes at rates comparable with other Australian businesses, the contribution of his wealth to our national purse would have been substantially greater than $400m.
Leaving aside (for now) the fact that Forrest can reasonably expect to receive half the value of his donation back as a tax deduction, the gift represents around 10% of his estimated personal wealth. This is a substantial contribution to his family’s commitment to dedicate more than 50% of their wealth to philanthropy, as signatories of the Buffet/Gates Giving Pledge, and it clearly makes him a philanthropic leader in our nation. But does success in businesses, tax-minimisation, and management of his public profile mean that Andrew Forrest is well qualified to decide priorities for our health, social support, and arts programs? And even assuming he has knowledgeable advisors to help him, do we want people who have devoted so much of their energy to generating personal wealth to be those setting our policy directions?
Keneally rightly points out that this kind of philanthropy is “inherently undemocratic”. This is not simply due to the scale of the influence exercised over public policy and programs by donors who are not elected or otherwise held accountable to the community; it is also because the very processes by which people gain access to the kind of wealth which enables major donations are corrosive to the principles of social and political life.
At best, major philanthropy can complement and enhance work towards community priorities; but it can also skew, subvert, or even destroy community activities. While the causes identified as recipients of Forrest’s largesse are undeniably ‘Good Things’, and the high-profile announcement served to draw attention both to the specific causes selected and to the general practice of major philanthropy in Australia, there is no check on how Forrest uses his influence in the sectors he has identified to target. There is no electoral process, no bureaucratic system, no public scrutiny to temper his preferences and priorities. We rely on the personality of the man and the influence of those to whom he chooses to listen; both are shaped by the experiences of his life to date.
Many people decide early in life that they wish to devote their energy to making the world a better place. Sometimes it is a conscious decision that ‘meaning’ is more important than esteem or pay in the great game of life; sometimes it is simply the expression of personal choice to engage in professions involving caring, or nature, or leaving time for family or community. These people do not become mining magnates. They may be teachers, nurses, gardeners, police, administrators… or they may work in more glamorous and remunerative fields such as science, technology, medicine or law. They are unlikely to reach personal net worth levels in the billions of dollars.
Some people do make it to the top of our financial reward system simply pursuing their passion. But most very wealthy people have chosen to prioritise the pursuit of wealth, or glory, or excitement or power over that of peace or fairness or sustainability or kindness. They have sought to win, to advance, to climb… with the unspoken assumption that each victory makes them superior to those whom they pass. Confidence in one’s own judgement increases as perspective narrows, creating a feedback loop in which successful wealthy people can easily believe themselves to have special insights well beyond their field of experience.
In addition, the kind of extreme financial success which places people in the position of having huge amounts of money to give away is almost always premised upon exploitation of a human and/or natural resource which is inadequately priced by the market. Unsustainable exploitation destroys natural environments, fly-in fly-out workers damage communities, insecure jobs threaten families, complex financial instruments destabilise economies, rent-seeking undermines trust in government, etc. And as is now being recognised, the very fact of large degrees of wealth inequality is destructive to social cohesion; we are all losers when some people win so extremely.
In this case there is a specific and direct example: the traditional owners of the Pilbara land on which Forrest operates. The Yindjibarndi people contend that Forrest’s profits have been made directly at their expense, with insufficient compensation; furthermore, the process of dealing with Forrest has had substantial negative impacts on the community, leading to conflict and even violence. There are people visibly suffering ‘collateral damage’ from his success. But whether or not this case is found to have any basis, the question remains why someone who has made money from mining should be in a position to shape our social fabric.
Extreme financial success cultivates disproportionate confidence in one’s own abilities and understandings, and often rewards behaviours which are actively harmful to our society. Tax minimisation is an example of both these issues: being rewarded for being ‘clever’ enough to avoid paying tax, and reducing the funds available to government to pursue its programs. The paradox arises when a person who congratulates themselves on having outsmarted the system then places themselves in a position to shape it. If your philanthropy works towards increasing wages or living conditions or choices for the lowest paid, you will reduce profits; if you work to improve cancer treatment, you need higher taxes for a larger health budget; and if you strengthen Indigenous communities, you may well prevent future mining.
Philanthropy, Forrest-style, brings this contradiction into sharp focus. It isn’t simply that he should have paid tax; it is that he wouldn’t have got to where he is without taking advantage of the weaknesses in the system which he now seeks to ameliorate. It’s admirable that wealthy people want to ‘give back’, but perhaps if they did less damage making their money there may be less need for their help.