This budget may represent something of a backdown from last year’s unprecedented vicious attack on the welfare state, and for that we can thank the widespread opposition, but it’s still a mean and nasty budget from a government that never saw a dollar going to a poor person that it didn’t begrudge, never a dollar going to a wealthy fat cat that it didn’t want to double.
The Abbott government has never recovered from the public mauling it received over last year’s budget, which represented the biggest attack on the working class for decades. Such was the backlash that it had to back down on cutting age pensions and the introduction of GP co-payments. It also reversed cuts to Legal Aid and homeless services.
Hockey was in no position to organise a re-run of the 2014 budget this year. He has had to tone down the rhetoric about “budget emergencies”, “ending the age of entitlement” and all the other class war language he deployed last year to try to ram through a wholesale shift of income from the working class to the capitalists.
This budget, Joe Hockey tells us, and the media faithfully parrot the lie, is all about “fairness” and “families”. It is nothing of the sort. If it’s not as bad as last year’s, it is still robbing the poor and coddling the rich and business.
Robbing workers and the poor
Still embedded in this budget are many things inherited from last year’s horror story. The biggest is the $80 billion cut in federal government transfers to fund state government health and education services. It also includes the deregulation of higher education, which could see fees for a three year degree rise to as much as $100,000. And cuts to Family Tax Benefits for low-income families are still in the mix.
Added to these is a string of further attacks. There’s the $1 billion in cuts to paid parental leave payments which will hit half of all parents currently eligible to receive the government payment. Health will suffer a further $2 billion in cuts, including dental care for children.
There’s the new requirement that mothers seeking subsidies for child care go out to work (or study or volunteer), regardless of their personal wishes or the child’s needs.
The government is still targeting those on welfare more generally and is aiming to raise $1.7 billion on curbing “welfare fraud”, code for harassing some of the most downtrodden members of the community. Abolition of the Large Family Supplement will rip out another $177 million.
There are the $450 million in new cuts to the federal public service over the next five years, with $400 million to be cut in just three departments – Health, Education and Immigration – taking the total cuts to $1.4 billion in four tranches. Seventeen thousand public servants have already quit or been forced out since Abbott was elected and many more thousands still face the axe.
With nothing much left to privatise, the government is hoping to raise $4 billion by selling off the Australian Rail Track Corporation, completing the disposal of much of the country’s transport infrastructure to the private sector.
Sciences and arts are also hard hit by this philistine government. Arts minister George “everyone has the right to be a bigot” Brandis is taking control of more than $100 million in funding from the Australia Council, while $262 million is being cut from the Sustainable Research Excellence program which enables university researchers to carry out major projects.
FIFO workers will be slugged with higher taxes on their remote living allowances while working holiday makers, backpackers doing backbreaking work in the horticultural industry in many cases, will now be taxed from their first dollar earned, rather than enjoying the same tax free threshold as Australian workers. Visa fees are also being jacked up for those hoping to work and study here, boosting the government’s coffers by more than $100 million every year.
The government’s announcement that this is a budget to help the young unemployed is a sick joke. It is spending $200 million on assistance programs and has been forced to back down on its plan to force all unemployed workers under 30 to wait six months before getting the dole – they now have to wait “only” four weeks.
But the government’s measures are pitifully inadequate. They do nothing to address the basic fact that there are now 300,000 unemployed people aged between 16 and 24 and only 150,000 job vacancies for the entire unemployed workforce. This budget did not create one new job. Far from it – with its public service cuts still more will join the dole queues. And to the extent that many women with young children will be forced into the workforce because of changes to childcare arrangements, young unemployed workers will find it even harder to find work.
Handouts for business and the forces of repression
If workers, students and the poor are still being forced to cop it, the Abbott government is handing out endless concessions to capitalists, both big and small. The Abbott government wants to partner with state governments to pitch in $5 billion in concessional loans to build infrastructure in the country’s north. This money will primarily end up in the hands of big business and on projects, such as railways, electricity lines and ports, overwhelmingly for the benefit of big business.
Small business owners, a core Coalition constituency, have been showered with money. First, there’s the 1.5 percent tax cut for all businesses with turnover of less than $2 million. Then there’s the 100 percent tax deduction on any business equipment expenditure up to the value of $20,000. And unincorporated businesses are not being left out: the government is giving them a generous tax concession. This adds up to $5 billion in blatant pork-barrelling.
There’s always money in a Coalition budget for measures to stoke racism, paranoia and war, and this year is no different. Adding to the $1 billion boost to spending on “national security” in the 2014 budget, this year’s budget provides for another $1.2 billion.
The spy agency ASIS has been given $300 million to boost its “intelligence gathering” capacity – which in the main comprises surveillance and harassment of Muslims. The telcos have been given $131 million to help them store metadata under the government’s new national security laws, the better to spy on us. And a whopping $750 million has been ear-marked for Australia’s intervention against ISIS in Iraq, along with more than $100 million on the embassy in Baghdad.
Sometime in the next 12 months the government will release its Defence White Paper which will argue its case to spend anything between $20 billion and $40 billion on new submarines and more billions on new warships.
On top of the $1.2 billion boost to national security funding, another $400 million has been budgeted to set up a new 6,000-strong highly militarised Border Force to take over Australia’s immigration detention network and front-line positions at airports and shipping terminals.
And just in case today’s youth are lacking in military fervour, the government is spending an additional $150 million on war propaganda – $100 million on a new war museum in northern France, an extra $36 million for ongoing World War I commemorations and $13 million for “official histories” of the Timor Leste, Afghanistan and Iraq wars.
Glaringly absent are any measures to tackle the real budget black holes, most obviously the tax concessions enjoyed by the super rich – the 475 people with superannuation balances of more than $10 million who pay no tax whatsoever. The government has also retreated on the “Google tax” it was toying with earlier this year, a tax on companies that shift profits out of Australia to tax havens.
Little wonder that Jennifer Westacott of the Business Council called it “a very careful, a very sensible budget”.
The cash splash on infrastructure, small business, the military and spy agencies, and the ending of any reference to “budget emergencies” in the 2015 budget makes clear the government’s hypocrisy about the urgent need for drastic cuts last year.
The government has no qualms about spending money; it’s just a matter of who it’s spent on – the rich enjoy largesse, penny pinching is only for the proles.