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Issue #1641      June 4, 2014

Federal budget 2014-15

Myths, lies and deceit

(Part 2)

Lie: This Budget redirects taxpayers’ dollars from unaffordable consumption today to productive investment for the future, while maintaining a strong safety net.

Fact: Consumption is not unaffordable. The productive investment is a reference to part of the real aim of the budget – increasing company profits by cutting taxes. The cuts to people’s incomes and fees for GPs and higher PBS charges will reduce purchasing power and have a contractionary effect on the budget. This will result in higher unemployment, more bankruptcies and lower tax revenue.

As for “maintaining a strong safety net”, the safety net is being pulled from under people with all the cuts, Medicare co-payment and other higher charges. It would be more accurate to describe it as “the vanishing safety net”. The term “safety net”, albeit now part of everyday language, is also misleading. Social security payments should be seen as a right, not some sort of charitable, stigmatised payment.

Myth: “We must always remember that when one person receives an entitlement from the government it comes out of the pocket of another Australian.”

Fact: This is a divisive mechanism which distorts the whole concept of a government raising revenue to provide for the needs and security of society. It leads to the argument that everyone should pay individually for the services they use – Medicare co-payment, education, etc.

It replaces collective responsibility with individual self-provision. Too bad if you have a serious illness or a disability and not born into wealth.

Lie: “… the government is adopting sensible indexation arrangements for schools from 2018, and hospitals from 2017-18, and removing funding guarantees for public hospitals. These measures will achieve cumulative savings of over $80 billion by 2024-25.”

Fact: There is nothing “sensible” about robbing education and health of $80 billion in funding. It is an act of a callous government that has total contempt for ordinary working people.

Deceit: “This Budget will take steps to put health spending growth on a sustainable path, with all Australians making a contribution to the cost of health services.”

Fact: People already contribute through the Medicare levy and the centralised taxation system. Health services are a basic human right and should be provided on the basis of need, with no fee at point of delivery. Funding should continue to be through central revenue.

Deceit: “The current system … sees the tax payer losing money every year, because … the tax payer is paying a higher interest rate than the students are repaying.” Increasing the interest rate on student loans (HECS/HELP) “is simply recovering the funds the Commonwealth is currently spending on behalf of students, so I don’t think that is an unfair measure.”

Fact: This is another way of saying that the government should not be “losing” money on lending money to students. The government is not a company; there is nothing wrong with it being out of pocket providing higher education. All levels of education should be free and funded out of central revenue.

Lie: The budget measures will “spread opportunity to more students” and make Australia’s universities the best in the world.

Fact: Taking $20 billion out of universities, deregulating (raising) fees, commencing repayment of HECS/HELP loans at a lower income and doubling the interest on student debts will turn education into a privilege, not an opportunity for more students.

Some universities already have plans to increase fees for some Arts degrees by 50 or 100 percent or more and for prestigious medical and law degrees by 300 or even 400 percent.

Lie: “We are very competitive in the OECD in terms of our spending on education.”

Fact: Australia already ranks 23rd out of 28 OECD countries and looks set to slide further down the rankings. Or maybe the Education Minister, with his neo-liberal twisted way of thinking, is competing to spend the least on education. If so, then Australia is extremely competitive!

Deceit: ‘’We want to change the mindset and culture of our young people, and I think that’s a good thing to do, not a bad thing,” said Tony Abbott. The budget will impart such concepts as ‘’self-reliance’’ and ‘’enterprise’’, and a move away from ‘’the culture of entitlement in some areas to a culture of opportunity and hope’’.

Fact: Denying under 30-year-olds an income for first six months of unemployment does not increase “self-reliance”. It is a recipe for poverty, dependence on parents or charity, despair and mental illness.

Likewise, placing under 25s on the youth allowance of $207.20 and 25-30s on NewStart on Work for the Dole programs does not benefit young unemployed.

Deceit: “I say to the Australian people … those who can work, should work ... Australians under 30 years of age should be earning or learning.” It’s “learn or earn”.

Fact: Who could disagree? But the where-with-all for young people to work or earn is being ripped from them in the budget. How can they learn when university and TAFE fees are set to rocket, TAFE courses are being closed and already inadequate income support slashed? How can they find a job with youth unemployment rates of close to 20 percent in some areas?

The “learn or earn” rhetoric replaces the old “dole bludger” slur and is just as dishonest, suggesting that young people are ripping off the system, with no intention of working or gaining a qualification.

If “learn or earn” were the real aim, then the budget would be increasing not cutting employment services, funding job creation programs, and increasing income support and abolishing TAFE and university fees.

Lie: All must do “heavy lifting”.

Fact: The biggest mining companies stand to gain an estimated $5 billion or more with the abolition of minerals resource rental tax and save $11 billion from the fuel tax credit scheme.

The rich are hardly doing much lifting with a temporary increase of 2 percent in their highest marginal rate – $400 a year for someone with a declared taxable income of $200,000.

Part 1 appeared last week in Guardian, #1640.

Next article – NBC censors Snowdon’s 9/11 comments

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