In his frantic bid to secure a fifth consecutive election victory for the Coalition, Prime Minister John Howard has fired up the amp and is loudly proclaiming his message that growth and increased private wealth will solve all problems. Howard is presenting his message — pump-primed by a lavish promise of personal tax cuts (largely for the already wealthy) and proclamations that economic growth can proceed unhindered (in spite of growing environmental concerns and increasing inequality) — like a spruiker at a country sideshow: enjoy the fairy floss and don't mind the smell of bullshit.
Howard's message is clearly aimed at "aspirational" voters. "The good times need not end", screamed the headline of the October 17 Sydney Morning Herald, paraphrasing Howard. "Growth is good", Howard told the SMH, with echoes of fictional character Gordon Gekko's "greed is good" motto from the 1987 film Wall Street. Howard is attempting to ride the wave of apparent affluence all the way to election victory, based on what he perceives as the manifest private interest of the Australian voter.
On October 16, Howard and PM-in-waiting Peter Costello launched the Coalition's bid for re-election with the announcement of $34 billion of tax cuts to be phased in over the next three years, which would disproportionately benefit the wealthy, with the largest savings made by those earning more than $75,000 a year and particularly those earning more than $180,000 a year.
However an article by Kenneth Davidson in the October 18 Melbourne Age exposed the tax "cut" plan as a total fraud.
Davidson reported that "based on Treasury's inflation rate assumption of 2.75 per cent for 2007-08 for the four-year period", the "so-called tax cuts of $34 billion are about equal to the cost of full tax indexation over the period. In other words, if wages don't keep pace with inflation or if inflation moves above the upper band of 3 per cent set by the Reserve Bank to manage monetary policy, wage earners' real disposable incomes could fall despite the nominal tax cuts."
Howard argued that the tax cuts were the Coalition's response to persistent levels of social inequality. "The fairer, economically more responsible way of dealing with cost-of-living pressures is to ... give the average taxpayer the wherewithal to deal with the pressures in the way he or she thinks fit", Howard was quoted as saying in the October 16 SMH.
Starving public services
The tax cuts, along with the six previous rounds of cuts introduced by the Howard government since the introduction of the GST in 2000, divert money away from already impoverished social services and add steam to the Coalition's privatisation agenda. Public services are starved of funds, while "consumers" are forced to plug the gaps with private health insurance and private school fees or endure substandard services.
In a period when the national deficit of health funding is exposed daily with stories of overcrowded and understaffed emergency waiting rooms in public hospitals, the Coalition is refusing to commit to extra funding. A report prepared by the Australian Institute of Health and Welfare, released on October 4, found that over the decade to 2005-06, federal funding of public hospitals declined as a proportion of total funding from 45% to 41%. While real federal health spending increased in that time, the growth in federal funding was far outstripped by costs, with the deficit made up for by state and territory governments. Over the same period, individual out-of-pocket spending on health care has increased in real terms by 4.2% per year.
The message from the Coalition is clear. If you want decent health care pay for it yourself — either directly, or by taking out federal government-subsidised private health insurance and using private health-care facilities. The public system will continue to be starved of the necessary funds to allow it to provide an adequate level of care.
The situation is even more dire as it relates to dental health. In a report published in June, the Australian Consumer's Association magazine, Choice, reported that only around half of the adult Australian population visited the dentist at least once a year, while 25% had untreated decay and 20% gum disease of varying severity. The high cost of dental care and the unavailability of — and long waiting lists for — public treatment are the reasons.
In 1996 the Howard government abolished the Commonwealth Dental Health Program, which had provided federal funding to assist state-controlled public dental hospitals and had enabled the reallocation of resources to treatments other than extraction. In the 2005-06 financial year, however, government funding via the 30% tax rebate for private health insurance just to the dental component of ancillary cover was estimated by Choice at being $438 million — over four times the cost of the public funding program scrapped in 1996.
In the 2007 budget, the federal government allocated funding for dental costs for those with a chronic illness. However, here again, the funding will come in the form of a subsidy to the private dental industry, in that it entitles those judged at serious risk to dental treatment by private practitioners to the value of $2000 in any calendar year. While the Coalition is therefore prepared to shower the private health industry with funding, it refuses to adequately fund public health services.
A similar imbalance remains in federal funding for schools. Between 1996 and 2007, the proportion of federal funding going to public schools fell from 45% to 35%, according to NSW Teachers Federation president Maree O'Halloran, leaving public schools at least $1 billion per year worse off than if funding had been maintained at 1996 proportions.
The decline in all-government funding for public schools has led to an estimated $2.9 billion annual shortfall in funding for public schools, according to the NSWTF. At the same time, federal funding for private schools has increased. While the Coalition government argues that the increased funding for private schools is the result of increased enrolments, the figures tell a different story.
"While there has been an increase in private school enrolments, the funding increases from the federal government have been far greater", O'Halloran said in a statement on the union's website. "This is best illustrated in per capita terms. In 1996 for every one dollar of direct federal recurrent funding per public school student, approximately $4 were spent on a private school student. In 2006 that figure was approximately $6. Thus, even if enrolments in a private school have dropped over the last decade, federal funding may still increase. For example, Newington College had an enrolment decrease of 8.3 per cent from 1996 to 2006 but federal funding increases of 234 per cent."
In education, along with health, the Coalition government's agenda is one of privatisation, accelerated by starving public institutions of the resources they need to provide good services. Howard and Costello's promise of tax cuts rather than funding badly needed services will only advance that privatisation agenda even further.
In an election campaign period, the question remains to be asked — what is the alternative? Self-confessed fiscal-conservative Kevin Rudd announced Labor's "me-too" tax-cut plan on October 19, which prompted Costello to liken him to a student who had copied "91.5% of the answers from the student sitting next to him".
Labor's sole sweetener is its proposal to defer tax cuts for those earning over $180,000 to fund rebates to some families for computer-related educational expenses and a $400 million fund for reducing hospital waiting lists.
However while Labor is quick to attack the Coalition's record on health funding, Rudd has only offered an extra $2 billion over four years to be spent on 750 public hospitals nationally and no guarantee to restore the federal proportion of health funding back to pre-Howard levels. As far as schools are concerned, Labor junked former leader Mark Latham's rather tame proposal to freeze federal funding for the richest of private schools in March. Its policy is now practically identical to the Coalition's.
Be prepared for more of the same as the election campaign circus grinds on. While both the Coalition and Labor will continue to roll out barrels of cash in an effort to win votes, don't believe the hype. Every dollar they promise to return to the already wealthy is another dollar taken away from your local school or hospital. In the interest of preserving our public services, don't buy it.