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Issue #1542      4 April 2012


Dump the budget surplus

It is that time of the year again, the razor gang is working overtime and Treasurer Wayne Swan is trying to soften public reaction with warnings that “we will need to cut and cancel existing programs if we are to meet our targets … .” Previous optimistic forecasts of economic growth and taxation revenue are being downgraded. Swan and Gillard remain determined to return the budget to a surplus and win the praise of their patrons from the big end of town and the private ratings agencies. The targets of the cuts will be those most in need. The beneficiaries will be the big banks and big business.

The Australian government is following the same neo-liberal script as other social democrat and conservative governments in Europe. The pace and form the cuts take may differ, but the essence is the same – winding back the “welfare state”, privatisation, corporate tax cuts, and bailing out the corporate sector at taxpayers’ expense. The tragedy is these policies not only hurt their victims – the low paid, welfare recipients, workers and their families – but also have a contractionary effect on the economy at a time when demand for goods and services needs to be increased.

It is scandalous that the unemployed are expected to live on $34 a day. The NewStart allowance of $237.45 per week is only 40 percent of the minimum wage and $133 a week less than the aged pension. The lack of public housing is another crime, with waiting lists of up to 20 years. The government’s response is to suggest people move to regions where the waiting list is only two years long (and lose your job or NewStart) or enter the private market! Moving is no solution; it does not create one additional residence. Nor is private rental of $400 or $500 a week. We need more affordable public housing.

The Australian Council for Social Service (ACOSS) has launched a campaign for an immediate increase of $50 a fortnight in NewStart, Parenting and other welfare payments. Even this extremely modest claim is unlikely to be listened to in Canberra. The government’s response to calls for increasing NewStart payments is people are only out of work for a short time. According to ACOSS, two in three NewStart recipients receive the benefit for more than a year. Fifty-two percent of “jobless families” were persistently jobless for the three years to March 2010. It is the children of “out of work” parents and sole parent families who suffer most – their diet, health, school and social activities are affected.

The ACTU is arguing for an increase of $26 a week in the minimum wage to bring it to $615.30. Their claim hardly keeps up with inflation and looks set to be undermined by employer and government demands to discount it for an increase in superannuation contributions. Wages need to be increased, as do social security payments if millions of Australians are to be lifted out of poverty and live with dignity.

There is no economic argument, let alone a humanitarian one, to justify subjecting hundreds of thousands of Australians to poverty. There is no shortage of money; it is a question of distribution.

What would be of most benefit to the people and the economy: $5 billion in diesel fuel subsidies OR job-creating development of alternative renewable energy sources? The $5 billion private health insurance rebate (subsidy to private hospitals) OR a comprehensive dental scheme under Medicare and well funded public hospitals? The $30 billion plus preparing to fight US imperialism’s wars OR slashing military spending, a genuine defence policy based on peaceful coexistence and the money to fund public housing and public education? More corporate tax cuts OR increase the aged pension, NewStart and other welfare payments? Higher profits and lower wages OR higher wages and lower profits?

These are political and ideological choices based on class interests. It comes down to which side are you on? The side of the big banks and corporations or the side of the people? The Treasurer may be in for a rude shock come the next elections when the working class of Australia are not as impressed with a budget surplus as the IMF and ratings agencies are!

Next article – Taking Issue – On Syria

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