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Issue #1731      May 18, 2016

Deep social cuts and …

$1 trillion for the military

The media called it a bland budget. Big business is extremely disappointed with the budget and the Coalition’s record. As far as it is concerned the Coalition have had almost three years to carry out a major overhaul of the role of government and how it raises income and spending priorities. The Coalition has failed dismally in the eyes of many members of the Business Council of Australia* (BCA).

It was not for lack of policy. After all, the BCA drew up an economic and social blueprint for the Coalition. As soon as the Abbott government came to office it commissioned a National Commission of Audit. Former BCA CEO Bruce Shepherd was its chair.

The BCA’s chief economist and director of policy, Peter Crone, led the Commission’s Secretariat. As a former adviser to the Howard and Victorian Kennett governments, Crone had impeccable neo-liberal credentials for the job. (See Guardian, “Abbott’s audit: By big business, For big business”, #1616, 30-10-2013)

Corporate blueprint

The Audit report spelled out a clear neo-liberal agenda, as dictated by global capital, for privatisation of government, deregulation, competition policy, dismantling the social security system and a takeover of the state by big business. The model is similar to the British conservative government’s Big Society.

The Abbott/Hockey government publicly supported most of its recommendations.

These recommendations included:

  • aged pension to be set at 28 percent of average weekly earnings (amounting to a real reduction)
  • tougher means test for aged pension to include part or full value of home in the assets
  • slower roll out of National Disability Insurance Scheme
  • co-payments for Medicare with abolition of bulk billing
  • means testing Medicare
  • those on incomes above the threshold required to take out private health insurance for medical coverage
  • deregulation of private health insurance premiums
  • higher threshold for Medicare safety net
  • price rises for medications on Pharmaceutical Benefits Scheme
  • Family Tax Benefit Part B abolished with a new supplement paid to sole parent families who lose this benefit
  • a single means tested child care assistance system
  • cuts to eligibility for carer payments and carer allowance
  • minimum wage to be set by states and reduced
  • funding cuts for higher education
  • repayment of student loans cut in at minimum wage at higher interest rates
  • funding cuts to foreign aid program
  • funding cuts to Indigenous programs
  • funding cuts to ABC and SBS
  • abolition and mergers of government departments and agencies such as of Border Control Australia by merging the Department of Immigration and Australian Customs
  • privatisation of government services and entities including Snowy Hydro, , Australia Post, and Defence Housing
  • review of GST rate (increase in GST)
  • single parenting payments be reduced from a maximum of 25% of Male Total Weekly Earnings to 25% of Average Weekly Earnings (a reduction of 16.6%)
  • abolition of the Clean Energy Finance Corporation
  • abolition of the Australian Renewable Energy Agency
  • increase in military spending to two percent of GDP.

The Audit’s only reference to “climate” was to abolish the Climate Change Authority! The only reference to “environment” was to the “fiscal environment”! In Treasurer Scott Morrison’s 2016-17 budget speech these two words don’t even rate a mention, not even a token reference.

Horror budget

The 2014-15 horror budget which contributed to the downfall of Prime Minster Tony Abbott and Treasurer Joe Hockey contained most of these measures or slight variations of them. The few that didn’t appear have been the subject of rumours and the usual denials.

It was, as the Guardian said at the time, a budget “By big business, For big business”, with a massive program of cuts to spending on health, education, social security payments, public sector workforce and other areas of benefit to people. All of this to fund corporate tax cuts and tax cuts for the rich.

The changes to Medicare are in train. The proposed $7, and later $5 co-payment, is being introduced by stealth with what will amount to a six year freeze on rebates paid to bulk-billing doctors.

The cuts to family tax benefits are also waiting in the wings having been blocked by the Senate.

The attempt to deregulate university fees is stalled in the Senate. The Abbott/Hockey $26 billion budget cut to schools were not mentioned. They remain on the agenda but thinly covered up by a $1.2 billion “increase” over three years, with strings attached.

Likewise, the Abbott/Hockey $54 billion cut to public hospital funding has been buried from view by a $2.9 billion “increase” to funding. Again these cuts have not gone away.

Hockey came up with some of his own cuts, in addition to those designed by the BCA. One of the cruellest of these sought to deny young people access to unemployment benefits for six months, followed by an obligatory six months of “work for the dole.”

Fortunately, this and some of the others failed to pass through the Senate.

The GST reared its ugly head but when the opinion polls pointed to its unpopularity, was removed from the table. It now waits hidden under the table until after the elections.

Workers’ nightmare, bosses’ dream

Regardless of who wins the elections, a few months down the track Moodys and the other private ratings agencies will also rear their ugly heads.

They will point to the budget deficit, now almost twice the size of Labor’s “tsunami” deficit of 2013-14. There will be the all-too-familiar warnings of a downgrading from AAA if the “hard decisions” are not taken to cut social spending, downsize the public sector and slash corporate taxes.

If the Coalition gain control of both Houses of Parliament then there will be no stopping them – the BCA will be smiling from ear to ear with the prospect of lower taxes, higher profits and super-exploitation of workers.

And it won’t just be a lower minimum wage that the BCA have in mind. Workers and their trade unions can expect a beefed-up Australian Building and Construction Commission, individual work contracts, massive penalties for industrial action, no restrictions on hours of work, unpaid overtime, unsafe working conditions.

But you would never guess any of this from Treasurer Scott Morrison’s speech and the “bland” budget delivered on May 3 that the BCA’s blueprint and the contents of the 2014 anti-people budget are still at the top of the agenda.

Workers have a rosy future if you believed Morrison.

He uses the word “jobs” over 35 times in his 2016-17, 30-minute budget speech. The only jobs this budget will create are in the military sector and a small number of manufacturing jobs that feed it. The bloated military budget of $1 trillion in the coming 20 years serves the interests of US war hawks.

The same money spent on the manufacturing sector, on developing renewable energy, building buses and trains or public housing would create hundreds of thousands more jobs and be of benefit to the people and the planet.

The word “plan” is used 29 times. In this case there is a plan, the BCA’s blueprint for big business profits, but its details are on hold until after the elections in the event of a Coalition victory.

But you would never guess from the Treasurer’s speech that these plans are still on the agenda, just hidden from view.

The government’s anti-people agenda emphasises the importance of ensuring the Coalition do not gain control of the Senate. They must be thrown out of office.

The Communist Party of Australia supports the election of Australian Greens and left and progressive candidates to the Senate in the coming election.

* The BCA is an industry association representing more than 100 of the top corporations in Australia.

Next article – Editorial – Coup in Brazil

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