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Issue #1648      July 23, 2014

A budget for the people, not the privileged

Why there is the campaign against the Abbott agenda

The Abbott Liberal-National government’s first budget has as its main thrust the transfer of wealth from working people to the pockets of the rich and big business.

Bust the Budget rally Sydney. (Photo: Tom Pearson)

In the name of “smaller government” and making dishonest claims of a “budget emergency”, the Abbott government has set out to gut social welfare and services, demolish the public service, deregulate the operations of big business and privatise what remains of public assets.

The Liberal-National Parties lied their way into office. They promised no cuts to education or health, no forced redundancies in the public service; no change to pensions; no increase in university fees; no increased taxes and more accountable government. They have torn up all these pledges in their first budget.

Moreover, each broken promise, each attack on pensioners, students, workers, unemployed, families, Indigenous Australians, or the public sector is accompanied by neo-liberal spin, outright lies and deception.

The budget reveals an ugly agenda that aims to grab back the rights and conditions workers have won over many decades of struggle. The Abbott government sees itself as responsible to big business, not the majority of Australian people. It aims to diminish the role of government, downgrading its ability to fund and manage social services and infrastructure.

It wants to slash and eventually get rid of company tax and a progressive income tax and rely on a goods and services tax to fund any remaining functions provided through the state apparatus. It wants user-pays services that we access through the market – the big corporations.

The government is trying to change public attitudes so welfare, pensions and other entitlements. These are not seen as a civic right but simply as a now “unsustainable” drain on the national economy.

When Treasurer Joe Hockey talks of the end of the “age of entitlement” he is only referring to the benefits working people are entitled to under current welfare arrangements, not to entitlements the business world enjoys, and looks forward to enjoying even more!

Neo-liberal Australia

The Abbott Liberal-National government came into office, after doing everything in its power to make the last Parliament unworkable, with the support of vested interests such as the mining lobby, big business and the media owners. Its first budget is at a time when society has already suffered three decades of neo-liberal capitalist policies, under both Liberal and Labor in Australia.

Taxation “reform”, mostly under the Hawke-Keating Labor and Howard Liberal governments, saw both company tax and top income tax rates fall, leading to a drastic loss of government revenue and ongoing pressure to achieve “smaller” government.

Income tax cuts, worth an estimated $169 billion of forgone government revenue over the last seven years, have largely ended up in the pockets of the top 10% of income earners – $71 billion or 42% of the total! In the same period company tax rates fell from 49c to 30c in the dollar – and the Abbott government aims to further reduce it to 28.5 cents.

An ongoing program of privatisation by both parties in government – of the Commonwealth Bank, Telstra, airports and other public assets – has also removed billions of dollars as sources of government revenue.

These inequitable tax cuts and continuing sale of public assets will be the cause of any budget crisis! Governments cannot cut revenue by hundreds of billions of dollars and still sustain services and welfare payments.

Australia is now a country where the richest one percent owns as much as the poorest 60 percent!

It is becoming a meaner country. Inequality is growing. With wealth comes the power to influence the rules. Government policies start to favour the super-rich regardless of how it works out for the rest of the society. The Abbott government’s budget is in this mould.

The Abbott budget attacks the most vulnerable social groups, while rewarding its big business mates though privatisations, outsourcing of government functions, tax cuts and targeted concessions.

The Treasurer claims all groups must do their share of “heavy lifting” to get us out of this fabricated crisis, but it is the lowest income earners who suffer most in this budget.

A single unemployed person is estimated to be 18 percent worse off as a result of its measures, whereas a couple on a $350,000 household income will not lose a cent.

It is estimated the poorest 20 percent of families will contribute $1.1bn more to budget savings than richest 20 percent.

On the other hand big business has a lot to gain in coming years from privatisations, outsourcing of government functions, tax cuts and concessions, abolition of the carbon and minerals resource rental taxes, and infrastructure construction. The big mining companies, banks, insurance and financial services, construction and pharmaceutical companies, in particular, will make a killing.

Supports militarism

The government is also pledged to raise military expenditure to two percent of GDP by 2023. Military expenditure is set to rise by $2.3 billion to $29.6 billion in the next financial year, then to $40 billion. This is in line with US demands on all NATO members (Australia is a NATO “global partner”) and strengthens the US military-industrial complex. It is also Australia’s “protection money” for sheltering under US hegemony, as the global superpower targets country after country for destruction and drags the world towards war.

The people respond

The Abbott budget has generated widespread dismay and anger among people throughout Australia. Surveys show a large majority regards the budget as an unfair one.

Rallies, protests and demonstrations have been breaking out all around the country.

People are calling for the Senate to block the budget and bring on another election, in the hope the Abbott government gets thrown out.

Those elected to Parliament are obliged to block this anti-people budget, but that in itself does not mean a new government will do much that would be fundamentally different.

The program the Abbott government carries out with great relish, a Shorten Labor government would also largely carry out because these policies are what the capitalist elites that control the global market economy and instruments of state power are requiring governments around the world to implement.

The Abbott Liberal-National budget:

  • Cuts $80 billion out of health and education – aim: to privatise these essential services and reinforce user pays principles.
  • Cuts more than $500 million from Aboriginaland and Torres Straits Island programs, including $122 million from Indigenous health over next four years.
  • Targets the unemployed by denying them benefits for six months then forcing them into “work for the dole” schemes: their options are to beg, steal or starve if they cannot get a job. The aim: to criminalise the poor and use them as cheap labour in privatised prisons, such as in USA.
  • Cuts nearly $1 billion out of vocational and trades assistance programs, making it more difficult for young people to get skilled work training.
  • Attacks the prospect of workers having well paid jobs in future by cutting industry programs that encourage innovation, and assist industry and R&D – including the Automotive Transformation scheme that was to help transition to new industries as carmakers close down.
  • Sacks some 16,500 public sector workers, merging, scrapping or selling off 70 agencies.
  • Cuts $370 million funding to CSIRO and ANSTO for science research. Cuts total funding for programs to track or mitigate climate change from $5.75 billion to $500 million by 2017-18.

However, the mining sector continues to receive billions of dollars in subsidies – up to $14 billion. It keeps its diesel fuel rebate and will have the resources tax removed.

Industries with the biggest carbon emissions not only emerge unscathed, they actually benefit in the budget because of the removal of the carbon tax and renewable energy programs.

The call to “Bust the Budget” raises a deeper demand – the demand for a fundamental change in the direction of Australian politics.

The present political agenda, as exposed in this budget, must be replaced by a progressive program of government revenue raising and public spending that aims to improve the lives of the people, improve society and protect our environment, rather than merely manage the profit system and damn everything else.

We must build a broad popular alliance, organised around labour and its principal demands to achieve this; and be prepared to take on the ruling elites and challenge their right to remain holding on to power.

Labour needs to organise and prepare to take power to itself, as the only guarantee that people not profits and cooperation not exploitation are the organising principles by which we manage ourselves. This is called a program for socialism.

“We can change the world!

Our work creates the future!”

The article was taken from a pamphlet published by the CPA Sydney District: sydneydistrict@cpa.org.au

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