Coalition sharpens the knives

February 28, 1996

By Peter Boyle The fact that the Coalition's February 15 announcement of plans to cut $6.3 billion from government spending (over three years) was met with calls for a tripling of these cuts from the Murdoch and Packer press makes the prospect of a Coalition victory on March 2 even more ominous. The editorials demanded cuts — from whichever government wins — to cover a suspected running deficit of $8 billion in this year's budget. This means that the Coalition's announced plans should be taken as more an indication of where a Howard government would aim its cuts rather than the scale of such cuts. The jobless, migrants, youth and public sector workers are the main targets in the threatened cuts. Overseas aid is to be cut to a record low 0.29% of GNP, health by $98 million and higher education by $171 million. But the social security budget faces the biggest axe. The Coalition has decided to pick on the weakest sections of the population first. A "saving" of $616 million is to come from depriving new migrants of the right to social security for two years — a move that has been condemned as racist by migrant welfare bodies. This extends the period of official second-class status for migrants. At present (under changes brought in by the Labor government) new migrants are deprived of the right to social security for their first six months in Australia. Another $1 billion of social security cuts are to come from tightening access to unemployment benefits and from greater efforts to chase so-called social security fraud. These will disproportionately hit migrants, Aborigines, youth and people with disabilities. "With the tightening of the activity tests, the Coalition is simply raising the hurdle for the unemployed people so that they will have to fail", Sydney's Welfare Rights Centre director, Michael Raper, told Green Left Weekly. To meet their savings target, he explained, a Howard government would have to remove about 25% (about 180,000) of those on unemployment allowances for an average of four weeks a year. This is in addition to the large numbers already penalised by harsh restrictions introduced under the Keating Labor government. Last year, 127,000 people on the dole were penalised for breaches of the act, most, according to Raper, for minor administrative infringements. At present, you may be penalised by losing the dole for six weeks for simply missing an appointment with the Commonwealth Employment Service. The Coalition may increase these penalties. Raper says that there is also a danger that a Coalition government would seek to meet its targets by:

  • imposing new bureaucratic requirements that will trip up the less sophisticated unemployed, people from non-English speaking backgrounds and people with psychological or educational disabilities;
  • scaring people (especially the young, Aborigines and recently retrenched people who believe they may get another job) from applying for unemployment benefits.
Migrants from non-English speaking backgrounds suffer the highest unemployment rates after Aboriginal people, yet the Coalition also plans to cut $25 million from the Adult Migrant Education Program. The withdrawal of social welfare services and payments will impact strongly on women. In effect, women in the home will be expected to provide the services that enable the Coalition to make its cutbacks. While John Howard might calculate that he won't lose too many votes by punishing the voiceless, his decision to axe 24,000 public service jobs and to make it easier for companies to sack workers may cost him on March 2. Unemployment is consistently listed as the top concern of electors in polls. This is not surprising, since even in the "boom" phase of the current economic cycle, official unemployment is 8.6% or 770,000. Real unemployment could be 30% higher than the official figure. About 225,000 of these are long-term unemployed (more than a year). After the last three recessions, unemployment has failed to drop by as much as it increased during the slump. So there is a lot of insecurity in the work force. Few working-class families haven't been touched by unemployment. What worries many workers even more is the fact that more than 65% (525,000) of the unemployed are between the ages of 15 and 24. This does not include hundreds of thousands reluctantly serving time in schools and about 135,000 on temporary labour market programs. The latter are on short training courses or training-on-the-job, but most of them don't have a real job to look forward too. The high youth unemployment not only indicates the grim future but brings with it a host of social problems, including crime, drug abuse and one of the world's highest youth suicide rates. In this context, forcing thousands more of the unemployed off benefits offers only apparent "savings" and it may not win as many votes as it might once have won for reactionary politicians. Free market economists argue that the solution to unemployment is to force the unemployed to work for less. To encourage them to do this, access to social security must be restricted. So Howard's attacks on the unemployed are an essential part of his plans for all workers. His objective is to speed up the deregulation of the labour market, a process begun under Labor. While Labor introduced enterprise bargaining with the collaboration of the ACTU, Howard envisions a faster transition to a system based on individual employment contracts. Howard has announced that he wants to get unions out of the bargaining process between workers and their bosses (back to the 19th century servant and master relationship) and to eliminate the already watered down protection of wages and conditions through awards of the Industrial Relations Commission. The IRC will be phased out under the system the Coalition has announced as it loses jurisdiction over people entering the work force for the first time and workers who change jobs. Howard's promise that wages won't fall is also contradicted by the chorus of bosses calling for the speeding up of such labour market "reform" precisely to lower wage costs. The wage-cutting effect of labour market deregulation has been clearly demonstrated under Labor's enterprise bargaining system. After 13 years of Labor, wages rates have fallen and working-class families are managing to maintain their standards of living only by working longer hours and harder. Working-class families are more indebted. Women in the work force are still paid on the average 65% the wages of male workers. Women also make up the majority of part-time and casual workers, and will be among those least able to resist exploitative individual contracts. For the same reasons, women have tended to be the biggest losers from enterprise bargaining. John Howard's "family package", announced at his campaign launch, gives some small tax relief only to families in which only one parent works. The aim is to create additional economic and ideological pressure to force women back into the home.
[Privatising welfare: ... and ain't i a woman?, page 18.]

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