Labor Opposition Leader Anthony Albanese’s budget reply speech on October 8 failed to offer an alternative course to the Coalition government’s gas and arms export-based vision for Australia’s future set out in its budget two days earlier.
Despite Albanese’s rhetorical claims to be presenting an alternative based on “Labor’s values of fairness, security and the power of government to change lives for the better”, he rushed to support the Coalition’s plan to give billions in more tax-cuts-and-subsidies for its business mates — to be funded by a historic increase in public debt to nearly $1 trillion.
Albanese added his own plan to boost the “defence industry”, as well as endorsing the Coalition’s plan for $270 billion of “defence spending”, promising to “maximise local content and create local jobs”.
There were some progressive policies announced, in particular a promise to remove the annual cap on the childcare subsidy and increase the maximum subsidy to 90%.
Other social spending promises, which were only vaguely sketched or just hinted at, were: a promise to increase spending on much-needed repairs to public housing and more spending on social housing; an indication that Labor supported a higher permanent Newstart rate and to delay the phasing out of JobSeeker and JobKeeper; and more funding for TAFE.
Albanese’s biggest promise to address the climate emergency was to “establish a new Rewiring the Nation Corporation to rebuild and modernise the national energy grid”. This, he said, would “allow the market to drive least cost, new energy production”.
An energy grid that could make full use of the increasing amounts of surplus energy being generated by the one-in-four households that have installed roof-top solar panels would be a step forward.
But the idea that it can be left to the “market” to address climate emergency in the short time left to avert catastrophic warming is totally wrong-headed.
As the Greens and the Socialist Alliance have pointed out, the climate emergency means we need a government willing to invest a large amount of funds in public works for a rapid shift to 100% renewables within less than a decade.
In the past, the major parties countered this with the argument that this was not affordable because it would mean increasing the public debt.
But the Scott Morrison government has blown that argument out of the water: it has budgeted to rack up a historic $1 trillion public debt — to finance tax cuts and business subsidies that will mainly benefit big business and the rich.
While the federal government would have us believe that the sharp rise in the public debt was because of emergency measures to deal with COVID-19, an RMIT-ABC fact check has found the $155.3 billion increase in gross debt since the pandemic hit Australia accounts for only 35% of the $443.1 billion of debt borrowed by the Coalition government since it came to office.
The inescapable conclusion from this is that the government has been racking up government debt to pay for tax cuts — subsidies to capitalists — and the biggest ever “peace-time” boost in arms spending.
New analysis by The Australia Institute (TAI) shows that the brought-forward Stage 2 tax cuts (less regressive than the planned Stage 3 cuts) will nevertheless disproportionately advantage the rich.
“This Budget gives a temporary boost to lower and middle income earners and a permanent boost to the wealthiest people in the country,” explained Matt Grudnoff, a senior TAI economist.
The study found that:
• In 2020–21, 41% of the tax benefit will go to the top 20% of income earners while the bottom 20% gets only 4%;
• In 2021–22, 88% of the tax benefit will go to the top 20% of income earners while the bottom 20% get nothing; and
• Those new tax settings favouring wealthy Australians will then be permanent.
As Greens leader Adam Bandt has pointed out, the Labor and Coalition parties rammed through these billions of dollars in tax cuts and corporate welfare and opposed the Greens’ amendments that would have excluded millionaires.
The tax cuts not only favour the rich but also favour men over women. This is despite the fact that women have been the hardest hit in the wave of job losses generated from COVID-19 pandemic.
The federal government is now also considering its Stage 3 tax cuts, which would return the income tax system to the regressive low of the 1950s. While Albanese hinted that Labor would vote against those tax cuts, he has shied away from making this an explicit promise.
These tax cuts will mean that future governments will have to borrow more to carry out desperately-needed public works programs to address the climate emergency and urgent social needs, including the aged-care crisis — another glaring hole in Albanese’s budget reply speech.
Labor’s capitulation to the Coalition’s tax agenda is hence a major betrayal of a climate-safe future.
[Peter Boyle is a member of the Socialist Alliance national executive.]