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Issue #1777      May 17, 2017

Budget 2017-18

“To those who have much, more will be given”

At first glance Treasurer Scott Morrison’s 2017-18 budget bears little resemblance to the Abbott-Hockey horror budget of 2014. It promises increased funding for health, education, the National Disability Insurance Scheme (NDIS) as well additional affordable housing and imposes a levy on the big banks. The language has changed from dire references to a “budget emergency” and “tsunami of government spending” to optimistic references to “better days ahead”.

But has the leopard really changed its spots? Is the 2014-15 budget dead, buried and cremated? The answer to that question is a resounding “NO”.

Despite all the talk about “fairness, security and opportunity”, the Budget is anything but fair. It sets out to clobber the unemployed, young people, people with disability and other social security recipients with even harsher and more punitive measures.

The CEO of St Vincent de Paul’s National Council, John Falzon, summed it up: “Our economy seems to be based on the perverse notion of ‘to those who have much, more will be given. And from those who have nothing, even the little they have, will be taken away.

“In other words, tax cuts for the corporates and the wealthy, but cuts to incomes, penalty rates, to social expenditure, to health and education for the rest of us.

“What we need is an economy based on from each according to their ability and to each according to their needs.

Targeting youth

“Young people are the very ones who are suffering increased exclusion and marginalisation and being blamed for being left out and locked out of the prosperity that’s being generated,” Falzon said in a message in a GetUp! You Tube.

There is no jobs plan. Morrison is relying on “signs of an improving global economy” to boost economic growth and “secure more and better paying jobs” in Australia. The economic underpinning of the budget is “the trickle down” effect, which in practice sees wealth flowing up to the rich.

Young people will be hit on all fronts with a new round of humiliating and punitive measures, whether it be cuts to education and unemployment allowances or access to employment. At present there is one job for every 10 people seeking employment.

There is nothing fair in shifting unemployed people aged between 22 and 24 off the NewStart allowance onto the much lower starvation Youth Allowance.

In a most insulting manner new recipients of the dole face the prospect of “random” drug tests and the possibility of being given a Cashless Debit Card in lieu of social security payments.

There will be tougher “mutual obligation” rules, and a brutal system of cutting payments if these are not met.

The government is doing nothing to create the jobs or provide the training that young unemployed require to enter the job market. Unless they have rich parents they are doomed to be excluded and humiliated.

Families take a hit with the freezing of family tax benefit rates for two years and the phasing out of annual family tax benefit end-of-year supplements. Means test thresholds are frozen, making it harder to qualify for payments.

Mean and insulting

The government is throwing a few peanuts at the 3.5 million people on age and disability support pensions and parenting payment with a one-off cash payment of $75 for singles and $125 for couples. While better than nothing, it would be of greater benefit if the electricity sector were nationalised and prices controlled.

The lifting of the freeze on Medicare rebates is likely to amount to an increase of a few cents and go no distance towards compensating doctors for the years of frozen rebates. Medicare needs to be adequately funded so that doctors can afford to bulk bill without resorting to the churning of patients.

While promising additional funding for the NDIS, the government is doing so through the Medicare levy, as if having a disability is some illness. Government payments should come out of general revenue as services, not be seen as “welfare”.

The Coalition government is increasing taxes on working people, supporting cuts to penalty rates, keeping the cuts to Medicare for at least another three years, and cutting $22 billion from our schools and $4 billion from universities. At the same time it is giving billions of dollars in largesse to big business and cutting taxes for the rich.

It won’t do anything to help the more than two million workers who are unemployed or looking for more work. Nor will it do anything to help the 40 percent who are in casual, contract or outsourced work.

Turnbull is cutting even more jobs from much needed public services meaning longer waiting times, fewer real people and more “robo” problems with the sending out inaccurate debt notices to social security recipients.

The levy on the five biggest banks sounds great. According to budget figures the government will pocket around $6 billion over four years based on the value of loans. Over the same period it is cutting the corporate tax rate which will deliver them around $7.4 billion.

There is a two percent tax cut for high income earners, the high income tax deficit repair levy ends and the rest of us pay an additional 0.5 percent Medicare levy.

There is yet another budget surplus predicted within four years. This has been a constant theme in every Coalition budget since the first Abbott-Hockey budget in May 2014.

This predicted surplus relies on additional income tax raised as a consequence of rapid wages growth. If you believe the Treasurer, we are on the eve of an explosion in wages after several years of record low growth. Exactly why this growth will occur is not clear.

The government has no intention of increasing the pay of its own employees, instead the “efficiency dividends” will continue along with the sackings.

As for climate change, or research and development of renewable energy, the budget is silent: climate change is the elephant in the room.

People’s budget

There is no shortage of funds that could be put to the benefit of the people and the environment. All it needs is a government prepared to stand up to big business and cut the big end of town’s corporate welfare.

  • Halve the $1 trillion military budget – save $500 billion over 10 years
  • Abolish fossil fuel and other subsidies to mining corporations – save $24 billion pa
  • Abolish negative gearing – save $5.5 billion pa and improve the housing market
  • Abolish capital gains tax discount – save $6.2 billion
  • Reverse income tax cuts for highest earners – raise an extra $4 billion pa
  • Phase out private health insurance rebate – save around $7 billion pa
  • Reverse corporate tax cuts – raise an extra $4.8 billion pa
  • End superannuation, trust and other tax rorts by the rich – raise an extra $15 billion pa (Figures from Budget Papers, Treasury Estimates and the Greens).

The total for such measures is well over $100 billion. Redirected to socially desirable projects, that $100 billion plus could go a long way towards fully funding:

  • Universal bulk billing of Medicare with adequate payment of GPs for their services
  • The establishment of a national preventative health care system
  • Provision of medical and community services for aged care
  • An immediate increase in NewStart, the Youth Allowance, aged pension and other social security payments to the level of the minimum wage
  • Fully fund the NDIS from general revenue and remove all the hurdles to qualifying for payments and services
  • Properly staff the public sector and provide services in a humane manner
  • Abolition of TAFE and public university fees, provision of student allowances and a phasing out of funds and subsidies for private institutions
  • An increase in the funding of government schools to the full Gonski amount as previously agreed with the states alongside the phasing out of funding to non-government schools
  • Restoration of previous cuts to apprenticeship schemes
  • An increase in foreign aid
  • Funding for research and development by the public sector of renewable energy and climate change study and mitigation
  • Restoration of funding to CSIRO
  • A progressive tax system with an increase in the marginal rate of those on high incomes and a higher rate for large corporations.

Next article – Editorial – “Receivers of stolen property”

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