Labor's budget — work until you drop

Federal Treasurer Wayne Swan delivered the Labor government's second budget on May 12. Swan's bleak message was clear: for those with a job, it's a matter of work until you drop.

For those without — particularly the unemployed, single parents and many Indigenous Australians — it's poverty and hardship without respite.

Amid promises of a rise of $32 a week for pensioners and a $22 billion infrastructure spending program, the budget also raised the eligibility age for the age pension.

Work longer ...

The changes to age pension will start in 2017. The eligibility age will rise by six months every two years, until it reaches 67 in 2023.

There is no guarantee that the age people will be eligible for the pension won't keep going up. A federal taxation review by treasury secretary Don Henry released with the budget said the eligibility age should be reviewed again before 2020. And don't expect it to be lowered.

The rise in the pension age will have a far bigger impact on women, who rely more on the pension than men. Women have fewer retirement savings than men overall. The average superannuation payout for women is one third of that for men. Women working full time earn 16% less than men.

To force all workers to slave for longer, the Henry review recommends "gradually aligning the age at which people can access their superannuation savings ... with the increased age pension age".

The government will also reduce its subsidy to voluntary superannuation savings from 150% to 100%. This will affect working people with fewer means, more than the wealthy who can compensate with a larger salary sacrifice.

Under Swan's new regime, early retirement (at least with any financial dignity) may become a thing of the past.

The government said the change was needed to fund the $32 a week increase for pensioners.

However, Swan admitted to ABC National Radio on May 13 that the change was part of a broader neoliberal agenda of "structural changes" that "are the sort of reforms that the rating agencies actually look at".

... if you've got a job

Swan accepted that the recession would lead to the Australian economy shrinking in the 2009/10 financial year. The budget predicts unemployment will rise to 8.5% or about 1 million by the end of 2010. Despite this, the budget did little to help those without a job.

The $32 a week increase offered to pensioners will not be enough to lift them out of poverty.

"Very low income pensioners will be underwhelmed by this budget, which fails to adequately supplement their incomes", Combined Pensioners and Superannuants Association's Charmaine Crowe said on May 13.

Crowe called for the pension rise to be extended to single parents. Sole parents "and their children will receive nothing in this budget, despite being one of the most financially disadvantaged groups in Australia", she said.

Unemployed people have also been largely ignored by the budget. The government has introduced a training supplement of $41 a fortnight to encourage single parents and unemployed people who have not completed year 12 to study. Yet it has not raised the rate of Newstart Allowance, which remains at just $226 a week.

Clare Martin, CEO of the Australian Council of Social Service said on May 13: "If the pre-Budget pension rate of $285 per week is not enough for a single pensioner to live decently, then $227 is not enough for an unemployed person."

Education, health, climate

The budget has increased funding to tertiary education and research by $2.7 billion. This is far less than the $6.5 billion recommended by the Bradley Review into higher education in December. It has also failed to adequately fund its training promises for young people.

Angelo Gavrielatos, national president of the Australian Education Union, said on May 12: "The budget does not provide adequate funding for additional TAFE training places; or the level of income support for young Australians while they are training."

The government has carried through with its threat to limit Medicare rebates for some specialist services. It claims the changes will stop specialists charging unreasonable fees at the public expense. However, the result will be that patients — particularly women accessing obstetrics and IVF treatments — will pay more.

The budget also introduces a means test for the 30% private health insurance rebate. This payment is a subsidy to private health funds' bottom line, but the government will not use savings made to improve public health delivery.

AMA President Dr Rosanna Capolingua said on May 12 that the budget "will mean sick Australians will wait longer or pay more for health.

"Estimates are that we will have one million people unemployed and we fear the ravages of this will hit the health system harder than the government realises."
The budget allocated $8.5 billion for transport infrastructure. However, $3.4 billion of that will go to roads, while only $4.6 billion will go to metro rail.

Of the money pledged to public transport, only Victoria's regional rail link will get serious funding.

The budget also allocated $4.5 billion to "clean energy". Of this, $2.4 billion will go to investment in highly dubious "low emissions coal technologies". Only $1.6 billion will go to expand solar power.

Despite committing to the (inadequate) target of 20% renewable energy by 2020, the government has only committed only $465 million to establish Renewables Australia. On April 30, the government announced Australia's biggest polluters were exempt from helping meet this target anyway.

In total the budget allocated $22 billion to infrastructure, including buildings for hospitals and universities.

Winners and losers

Other winners in the federal budget were the military, whose funding was raised to $25.1 billion, including an extra $1.3 billion for the war in Afghanistan.

Builders will continue to get a taxpayer funded subsidy via the extension of the inflated First Home Owner Grant until September. Small business will get a 50% tax rebate for all capital goods bought until the end of 2009.

At the same time, the government has continued to make migrants scapegoats for growing unemployment. The skilled migrant intake was slashed by a further 7000 — a total cut of 21,600 for the 2009/10 financial year, according to the May 13 Sydney Morning Herald.

Refugees will now have access to Medicare and be able to work, but the government will spend an additional $186 million "redeveloping" the Villawood detention centre in Sydney. An extra $650 million will be spent over six years on "border protection".

Indigenous health received only an extra $200 million in the budget, despite the government's pledge to "close the gap" on health.

The opposition has criticised the government for bringing in a record deficit of $57 billion. Much of the media has panned the budget for not making larger spending cuts.

Although many expected the budget to be even harsher, its assault on the rights of working people, the unemployed and single parents is real.

The military, developers, builders and the coal industry are the real winners. The rest of us are simply being told to work harder — for longer.

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