The mining and banking companies creaming billions in super profits from the mining boom — the biggest mining boom in Australia’s history — have done very well from the federal budget that was delivered by the Gillard Labor government on May 10.
The big mining companies will continue to pay the lowest ever share in tax and royalties while they make their biggest ever profits.
And on top of that, the budget guarantees to supply skilled labour (at the lowest possible cost) to the mining companies, to reduce these companies’ obligations to contribute to the training of skilled workers, and to subsidise, by billions of dollars, the building of transport infrastructure to get the minerals shipped out as fast as possible.
Never mind the environmental and social costs society as a whole will have to bear.
As for tackling our biggest common challenge — climate change — the budget does worse than nothing. It cuts $220 million from the Solar Flagships program to build renewable energy power plants.
Any serious climate change action hangs on the yet to be revealed carbon-tax/emission trading scheme to be announced later this year. But that too looks like it will do little to halt climate change — though it might help the billionaires who are setting up to make mega-profits from a gas-mining boom.
The Australian Petroleum Production & Exploration Association (APPEA) chief executive Belinda Robinson said the budget “shows the government understands the importance of the resources sector to Australia’s continued prosperity”.
This is a government that is prepared to pull out all stops to guarantee that the billionaires who already profit the most from this mining boom will profit even more. The rest of the population, the great majority, will just have to hope to benefit a little from the alleged trickle down effect — or do worse.
Worse if you are an unemployed single parent, a person on the disability pension or an Aboriginal person trying to survive on a welfare payment. All these poorest sectors were delivered yet another kick in this budget.
The racist and patronising income management scheme introduced by the Howard Liberal government’s NT intervention will be continued and extended to more Aboriginal communities.
Dr Cassandra Goldie, head of the Australian Council of Social Service, said that the “get tough measures” on the poorest and most marginalised sections of the population are “unnecessary and will be counter-productive”.
Although at least two-thirds of children in single parent families on welfare live in poverty, the budget imposes “a $56 per week cut in payments for some groups of single parents with teenage children and a $43 per week cut in payments for unemployed 21 year-olds”, ACOSS said.
Professor Peter Whiteford, from the Social Policy Research Centre at the University of New South Wales, wrote on the Inside Story blog that after years of welfare cutbacks in Australia, the percentage of working age people that receive more than 90% of their income from government benefits has fallen since the mid-1990s from 17% to 7.2%.
He also revealed that while the proportion of people with disabilities who are employed is 40% in Australia (compared with an OECD average of 44%), “the relative incomes of people with a disability are lower in Australia than in any other OECD country and poverty rates are the second highest”.
The attacks on single parents, the unemployed, people with disabilities and Aboriginal people are yet another appeal to right-wing populist prejudices fuelled by reactionary radio “shock jocks”, other conservative media commentators and right-wing politicians.
The amount of resources put into actually helping these layers find real jobs is much too small to really do the job.
Treasurer Wayne Swan made much of a $2.2 billion new investment in mental health. But while this was welcomed by mental health advocate and 2010 Australian of the Year Dr Pat McGorry, he added that it was really only $1.5 billion in new investment and this “does not yet fully reflect the level of unmet need”.
Funding for more dental care, a promise made to the Greens and the independents in return for supporting the Gillard Labor minority government, has not been delivered.
The Gillard government’s excuse is that funds are tight and some promises cannot be kept. And it is true that this budget has to deal with the hangover of the great financial crisis and a string of major natural disasters.
Up to $16 billion (or more) had to be borrowed to bailout the capitalist system after its global greed-driven crisis point in 2008.
But now that the big companies (especially the mining companies and the banks) are raking in billions in super-profits once again, why is it that the poorest and our common environment are being made to pay for the bailout of the capitalist system?
Just imagine if this supposedly “Labor” government really acted in the interest of the majority and forced the mining companies to pay just 34% of their profits (the average paid by the industry in the first half of this decade before it fell to 14% in 2008-9)?
Treasury estimated this sector’s profits just a year ago as “over $80 billion higher in 2008/09 than in 1999/00”.
This is just a small measure of the potential public revenue lost because the government is soft on the big mining companies. Mining profits are expected to soar much higher over the next few years, according to the budget papers.
“Mining investment has risen from $12 billion in 2003-04 to an estimated $56 billion in 2010/11,” Treasury said. “This is a precursor to an even larger surge over coming years as a range of large resource projects ramp up, led by the LNG sector. Mining investment is expected to reach record highs as a share of GDP over the next two years.”
A government that served our common good — instead of that of the billionaire profiteers — would tax these super profits and invest it in a radical transition to renewable energy, in public transport and to address other urgent social needs.
Further, it would also not spend the $1.47 billion it has committed to military interventions in other countries over the next four years and the billions more it will spend to buy expensive new offensive military warplanes and warships.
Billions will still be wasted on killing, occupying and oppressing people in other lands despite the announced $2.4 billion in savings from “defence”.
None of this money is for real defence and most of it is money allocated but not spent because of delays in deliveries of major equipment from the giant arms manufacturing companies.
Predictably, the Liberal-National opposition offered no real alternative course in opposition leader Tony Abbott’s budget reply.
Abbott’s only valid point was to note the real cost of living pressures facing most Australians: “Since December 2007, the price of electricity is up 51%, gas is up 30%, and water is up 46%. Education costs have risen 24%, health 20% and rent 21%. Grocery prices are up 14%. Since the middle of 2009, interest rate rises have added $500 a month to mortgage repayments while wages have risen just 7%.”
However, Abbott offered no solution except to help the super rich get even richer and hope that some of their profits trickle down.
Australia does have the resources to make the urgently needed investment in a just and sustainable future. But the overwhelming evidence is that we cannot count on the major parties to make such an investment.
[Peter Boyle is national convenor of the Socialist Alliance.]