Another slap in the face


Editorial: Another slap in the face

Last year, Prime Minister Keating labelled strident supporters of cuts to the budget deficit as "deficit daleks". This year, following the large increase in the balance of payments deficit, Treasurer Ralph Willis is saying that the May budget will incorporate a "further significant structural tightening" aimed at producing a budget surplus two years earlier than previously projected.

The financial press puts the likely budget cuts at around $5 billion, coincidentally what the Business Council of Australia put forward last year. Their proposed cuts, released in the Refocusing Fiscal Reform report, include $1.2 billion from social security funding by introducing tougher rules for unemployment and sole parent pensions, and less "generous" child-care arrangements.

$1.9 billion would be cut from health by introducing Medicare co-payments, abolishing pharmaceutical subsidies and introducing charges for some public hospital services. Housing would also be cut $400 million by restricting public housing expenditure to rent assistance, and all government departments would be expected to cut their budgets by 0.5%.

Other options to increase "national savings" are being canvassed by Labor, including the imposition of a 3% compulsory employee superannuation contribution. This is being touted as more palatable, especially in an election year, than tax increases, although the immediate impact on workers' pockets is the same. It would represent another major step forward in the long-term campaign to abolish the age pension.

The ACTU leadership is denouncing the levy as "inequitable" and threatening that it could end the Accord commitment to restricting wage increases. The same empty rhetoric has been spouted by the ACTU virtually every time the Labor government has tightened the screws on workers over the last dozen years. Keating will read it, correctly, as expressing a willingness to "compromise" yet once again — perhaps with a graduated introduction of the 3% levy, or through an additional 3% employer superannuation contribution to be stolen back through enterprise bargaining.

The final details are likely to involve a combination of heavy cuts to public spending, a compulsory superannuation levy and tax increases. The experience of 12 years of federal Labor reinforces the certainty that business will not be funding the latest balance of payments blow-out.

Once again, the ACTU will accept, on our behalf, that working people have to sacrifice in exchange for promises that this will make the system work better for "all of us" at some time in the future. Every previous such promise has been broken, but most union leaders are very good at not learning from experience so long as their own bread continues to be buttered.

The economic "recovery" is over for working people almost before it began, although business is still raking in high profits. After 12 years of rhetoric of sacrifice for the national interest and "responsible unionism", it amounts to one more large slap in the face.

If you like our work, become a supporter

Green Left is a vital social-change project and aims to make all content available online, without paywalls. With no corporate sponsors or advertising, we rely on support and donations from readers like you.

For just $5 per month get the Green Left digital edition in your inbox each week. For $10 per month get the above and the print edition delivered to your door. You can also add a donation to your support by choosing the solidarity option of $20 per month.

Freecall now on 1800 634 206 or follow the support link below to make a secure supporter payment or donation online.