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Issue #1616      October 30, 2013

Abbott’s audit:

By big business

For big business

It is a well known edict that when a government sets up an inquiry, the desired outcome determines the choice of personnel. Nothing could be truer with the Abbott government’s appointees to its Commission of Audit. The head of the Commission is Business Council of Australia president Tony Shepherd. The Commission’s secretariat is headed by Peter Crone, the BCA’s chief economist and director of policy, not a public servant. The aim of the audit is to provide the Abbott government with a blueprint for massive spending cuts and redefining the role of government. It is policy development by big business for big business.

The Commission of Audit will assess the role and scope of government, and whether “taxpayers’ money is being spent wisely and in an efficient manner”.

The Audit is a political exercise to justify big business’s agenda for Australia. It is a facet of the Coalition’s “Big Society” program. There will also be an inquiry by the Productivity Commission into workplace relations which will lay the basis for the return of WorkChoices on steroids – individual contracts, loss of penalty rates, denial of right of entry, further limits on “protected” industrial action, reduction in minimum wage, gutting of enterprise agreements, etc.

As stated in last week’s Guardian, “The Abbott government is about to embark on a massive transformation of the role of the government that would take the provision of social security and public services back to the Dickensian era. It is much more than a plan for ‘small government’, privatisation and the replacement of the ‘welfare state’ by self-provision and charity.” (“Abbott’s ‘Big Society’ – democracy under attack”, #1615, 23-10-2013)

The Audit will prescribe massive spending cuts, the sacking of thousands of public sector workers, cuts in service provision, outsourcing of government work, closure or consolidation of government departments and privatisation of remaining federal government assets.

At the same time it will set the agenda for massive corporate and personal (on the higher marginal rates) tax cuts. As a first step the aim is to cut company tax rate from 30 to 25 percent in this term of government. The GST will be increased and extended to items presently exempt (medical, education, fresh food), but that may be in a second term if Abbott gets one.

The Commission will look at duplication of roles between state and federal governments and determine which level of government should have responsibility for education, health services, environmental assessments, authorisation of new mining and developers’ projects, etc.

Treasurer Joe Hockey refers to the “Big Society” as the “end to the age of entitlement” – neo-liberal spin for what is commonly referred to as “the welfare state” and talks in terms of “small government” and “self-provision” of social security. Nothing is ruled out, according to Hockey.

Terms of reference

The terms of reference have a similar ring to the BCA’s “Action Plan for Enduring Prosperity” – that is, ensuring prosperity for big business. The scope of the Audit covers anything related to the functions, income and spending of the government.

The Commission must ensure “taxpayers are receiving value-for-money from each dollar spent” and eliminate so-called “wasteful spending”. By “wasteful spending”, neo-liberals mean expenditure that does not result in benefits to the private sector and profit generation.

For example, payments to single mothers (to use Abbott’s language) are seen as “wasteful spending” unless they are adjusted downwards to become an “incentive” to return to work. The school kids’ bonus and the low income super offset are already on the hit list.

The terms of reference direct the Commission to “identify areas or programs where Commonwealth involvement is inappropriate, no longer needed, or blurs lines of accountability.”

“Inappropriate” is spin for “it could be done by the private sector” or there are already private sector operators providing similar services. The aim is for the government to withdraw from service provision wherever possible.

The Commission will consider how to “improve the overall efficiency and effectiveness with which government services and policy advice are delivered.” This is spin for handing everything over to the private sector which, according to neo-liberal mythology, is more efficient. Or to give it to the large church charities which can do it cheaper, with non-union workforces including volunteer labour.

Likewise, “Exploring options for greater efficiencies in the federal government including contestability of services” is about privatisation. “Contestability of services” means putting public sector work out to tender and existing employees competing with cost-cutting, non-unionised contractors and church organisations to hold onto their jobs. It has already started in the community services sector.

“The Commission is asked to review and report on the long-term sustainability of the budget position … Where possible, the Commission should identify options to address … budget risks in the medium to long term, including by introducing appropriate incentives to encourage self-provision of services by individuals over time.”

These “incentives” include “appropriate price signals – such as the use of co-payments, user-charging or incentive payments …” This could result in the abolition of bulkbilling under Medicare, means testing of access to Medicare, limiting Medicare coverage to “basic” services, and so forth.

“Self-provision” includes schemes where people pay insurance to cover payments such as unemployment or sickness benefits in times of need. The government would no longer fund them out of central revenue. Superannuation is an example of this, where the aim is for government to eventually wind back the age pension.

The Commission may also consider “whether there remains a compelling case for the activity to continue to be undertaken; and “if so, whether there is a strong case for continued direct involvement of government, or whether the activity could be undertaken more efficiently by the private sector, the not-for-profit sector, the States, or local government.

Again, this is about the government abandoning its responsibilities for the wellbeing of society. For example, Medicare might be administered by private health insurance funds, all community services contracted out to the private sector or charities, states take over complete responsibility for education.

Nowhere in the terms of reference or the government’s rhetoric is there a mention of the wellbeing of the people, nothing to improve the lives of working people, to ensure workers have an adequate income or that there is full, secure employment. Not even a pretence of caring about anything except big business interests.

BCA CEO Jennifer Westacott said the audit provided a “once-in-a-generation opportunity to fortify Australia’s budget foundations and set in train a much-needed reform agenda to keep our economy strong.”

She should know. Abbott has adopted the BCA’s agenda and the BCA is running the Audit.

“It’s a chance to reset Australia’s budget priorities, remove inefficiency and duplication with the states, improve the performance of public services and begin setting aside funds to withstand economic volatility around the world and unfolding pressures at home, including our ageing population,” Westacott said, the same language as used in the terms of reference.

The cuts in spending, closure of services and mass sackings of public servants will fund corporate tax cuts and the maintenance of an obscenely bloated military budget. The contracting out and sale of public assets are gifts to the private sector, new profit-churning opportunities. The shifting of state responsibilities for social security to church and other philanthropic organisations is ideological, in part an attempt to impose narrow religious views on the community. They are a return to the Dickensian era of charity, dependency and abject poverty.

The whole audit process undermines the role of the public service in policy development and democratic processes, as the elected government transfers its role to big business. It amounts to a takeover by the BCA, the direct dictatorship of monopoly capital.

The BCA’s members are CEOs of the 100 largest corporations (monopolies) operating in Australia. It primarily represents the interests of the big banks, the major resources corporations, corporate services companies and major retail chains.

Monopoly dictatorship

The “independent” Audit Commission’s membership leaves no doubts as to who is running the country and the political and ideological thrust of their “Big Society” (Big Business, Small Government) agenda.

The Commissioners are Tony Shepherd, Tony Cole, Peter Boxall, Robert Fisher, and Amanda Vanstone, with Peter Crone’s role as head of the Commission’s Secretariat.

Following his appointment to the Commission, Shepherd announced his resignation as chairman of Transfield Services, a construction and services outfit that stands to gain hundreds of millions of dollars in contracts from the outcomes of the Commission’s audit. It has already made a mint out of government outsourcing and contracts.

Boxall harks back to the Howard era. He was chief of staff to Treasurer Peter Costello at the time of the Howard government’s national audit in 1996 and the billions of dollars in massive spending cuts in social spending that followed. He later headed the Finance Department from 1997-2002 and is noted for the sell-off of government buildings, the sale of Sydney, Brisbane, Melbourne and Perth airports and Telstra, and the outsourcing of IT to the private sector. He then oversaw the introduction of WorkChoices and the Howard government’s callous welfare to work agenda, as head of the Department of Employment and Workplace Relations.

Prior to his work for Costello and Howard, he worked for the IMF and Reserve Bank of Australia. More recently he has been an ASIC Commissioner and two years ago was appointed by Liberal Premier Barry O’Farrell as chair of NSW’s Independent Pricing and Regulatory Tribunal (IPART).

Cole is National Practice Leader of William M Mercer’s Investment Consulting practice. He has had extensive public service experience including as Secretary to the Treasury, Chairman of the Industry Commission (predecessor to Productivity Commission) and Secretary to the Department of Human Services and Health under the Hawke/Keating governments. He is a strong advocate of increasing the GST and was an Alternate Executive Director to the World Bank. He held the positions of Deputy Secretary to the Department of Prime Minister and Cabinet and Alternate Executive Director to the World Bank

Amanda Vanstone is a former Minister in the Howard government.

As already stated, Crone is the Chief Economist and Director of Policy at the BCA. He served on Howard’s personal staff as senior economic adviser for eight years. The GST was one of his babies. He has worked as an investment adviser and was an adviser in Treasury and Finance for Victorian Premier Jeff Kennett.

The Commission will provide an initial report to the government before January 31, 2014 and the final part in March, in time for inclusion in the 2014-15 budget.

Prior to the elections, Abbott had ruled out any changes for which the government did not have a mandate. Now, according to Hockey that promise only applies to measures “we said explicitly we would not do.” Everything else is up for grabs now. Other changes, such as the GST appear to be scheduled for a second term of government. The task now is to fight the changes and make sure there is no second term for the Coalition.

The planned cuts will have a contractionary effect on the economy, driving it into recession, further privatisations. The hand over of government services to the charities and other private operators will result in a decline in quality and accessibility. This will be compounded by user pays and higher charges. It is criminal for any government to dispose of its assets, leaving itself and the nation in a precarious financial position.

Individual unions have been fighting some of these developments which were commenced under Labor. It is vital that a united campaign involving the labour movement and wider community is built to defend the public sector and public services.

Next article – Editorial – CPA anniversary

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