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Issue #1641      June 4, 2014

BUST THE BUDGET

Stop attack on welfare

Sixty three percent of respondents to a recent Fairfax-Nielsen poll said that the federal budget is unfair. According to the National Centre for Social and Economic Modelling the poorest 20 percent of families would contribute $1.1 billion more to the budget savings than the richest 20 percent.

A recent survey found that 29 percent of Australian welfare recipients don’t have a secure or decent home, and 25 percent can’t afford at least one substantial meal a day.

The government proposes to cut family tax benefits by $7.4 billion, seniors’ concessions by $1.3 billion, the Seniors’ Supplement by $1.1 billion, and the Newstart or Youth Allowances by $1.2 billion. Government initiatives to help young people find work, like the highly successful Youth Connections program, will not be funded after July.

A recent survey by the Salvation Army found that about 25 percent of Australian welfare recipients can’t pay for medical treatment and more than 33 percent can’t afford prescription medicine. Some 29 percent don’t have a secure or decent home, and 25 percent can’t afford at least one substantial meal a day.

Another study from the Sydney University of Technology found that 25 percent of people on the dole for more than a year in Sydney had to beg on the street. Sixty percent relied on charity to survive, more than 40 percent could not afford medicine, 50 percent could not buy new clothes, 80 percent could not afford dental treatment and most had gone without heating or good quality food.

These people need GP consultations more than others and would be worst hit by the proposed $7 GP co-payment fee.

Yet the government now wants to deny benefits to unemployed people up to 30 years old for six months after they apply for the dole. Abbott declared pompously: “… it’s important that our institutional culture sends a very strong message that we expect people who are work capable to be either working or preparing for work.”

That makes no allowance for the lack of jobs or for distance from a potential place of employment. If the budget recommendations are implemented the rates of criminal behaviour, begging, homelessness and drug and alcohol addiction among young unemployed people will skyrocket.

Moreover, the government intends to eliminate a number of supplementary dole payments. It also wants to roll about 50 different types of welfare benefit into a single payment. The argument the government puts for that initiative is that the process would be more efficient.

However, as ANU Professor Peter Whitford explains: “If you want to simplify the system you level the payments up or level them down. With one option there are losers, with the other it costs money”.

Given the government’s mindset, the revised payment would certainly be based on or near the lowest benefit of all the currently available payments.

The government also intends to restrict disability support benefits for people under 35 years old. Even its sole welfare initiative, the paid parental leave scheme, promotes inequality, because it would provide new mothers with payments in direct proportion to their earnings.

That effectively contradicts the idea that those in greatest need should receive the most help, a principle which leads to the conclusion that parental leave payments should be reduced in reverse proportion to the family’s remaining income after the mother-to-be leaves work.

The government also wants to freeze some benefits associated with pensions, and to alter the pension indexation method. The pension would continue to rise, but only in conjunction with the Consumer Price Index, rather than average male earnings and the associated benefits would rapidly lose their value as a result of inflation.

The battle to convince families

The government is campaigning to convince working families that the budget is all for their own good in the long run, like a very large dose of communal castor oil.

The Financial Review backs them, saying it was “the budget we had to have”, and only takes the government to task for not having prepared the public well enough for the budget shock.

It comments: “… layer upon layer of the middle class welfare state built up over the past generation or two is now unaffordable given the competitive challenge from emerging market producers and the shrinking proportion of workers required to support the growing elderly and disabled populations.”

That’s nonsense. It’s certainly true that the proportion of elderly folk in the community is increasing, but the nation can certainly afford the current welfare and pension payments.

The government is trying to change the public attitude so that welfare, pensions and other entitlements are not seen as a matter of human rights but simply as a now unsustainable drain on the national economy.

But the nation is now far more productive than it was when the proportion of pensioners and welfare recipients was lower. The essence of the problem is not the cost of supporting the aged and welfare recipients, it’s the government’s budget priorities.

Abbott’s budget priorities include unsustainable support for big business, particularly mining, and for armaments purchases, at the expense of welfare, pensions and other areas of government expenditure.

In an attempt to set one section of working people against another, the government is claiming that the current Family Tax Benefit A is being cancelled and Benefit B is being reduced so that the money saved can be allocated to welfare payments.

Treasurer Hockey commented: “… payments ultimately come out of another person’s pocket. It doesn’t come out of the government’s pocket, it comes out of a working Australian’s pocket.”

But working people as a whole have always accepted the responsibility of supporting the aged and needy with their taxation contributions. In contrast, the corporate world as a whole does not endorse that principle, and bitterly resents paying tax at all.

Hockey has said that the “age of entitlement” should end. But he was referring to the benefits to which working people and the unemployed are entitled under current welfare arrangements, not to entitlements enjoyed by the corporate world.

Hockey’s budget speech failed to mention the other big winner, the military-industrial complex. The government had promised to raise the military budget allocation to two percent of the Gross Domestic Product (GDP) by 2023.

If the government gets its way military expenditure will rise by $2.3 billion by the next financial year, when total military spending will reach $29.3 billion, or 1.8 percent of GDP, and go on to $40 billion.

And much of that expenditure would benefit overseas interests, bringing little or no benefit directly to the Australian economy. To help it reach its two percent goal the government has committed to buying P8 maritime aircraft and F-35 joint strike fighters, the latter eventually costing $12.4 billion.

The Abbott government has served the interests of business by pledging to cut welfare and pension budget allocations, while eliminating the carbon and mining taxes and cutting the current rate of business tax. It has also attempted to muzzle its critics, for example by reducing funding for the ABC and ending funding altogether for the Australian Youth Affairs Coalition.

Various groups are now supporting the coming campaign called “Bust the Budget”, which aims to win the support of communities and influence the federal opposition and independent senators to oppose the budget in large part or entirely, in order to trigger a double dissolution. And that sounds like an excellent way to get rid of a really toxic government.

Next article – Editorial – A new political low point in Australian politics

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