‘Sharing the load'? Abbott’s budget a recipe for revolt

Saturday, June 28, 2014
Thousands of people have participated in protests against Abbott’s cuts.

LIFE FOR MOST AUSTRALIANS IS GETTING HARDER, WHILE POLITICIANS SERVE THE WEALTHY. BUT PUBLIC BACKLASH IS BREWING INTO A MOVEMENT TO CHALLENGE THIS SYSTEM, WRITES SUSAN PRICE.

In handing down its first budget, the Coalition government echoed its National Commission of Audit, warning that a “business as usual” scenario for public spending on welfare, pensions, public services, health and education is “unsustainable”, even “irresponsible” in Australia today.

Accompanying the warnings has been the rhetoric, repeated ad infinitum, that we should think of the economy in the same way we think of the household budget — and that like a household, the economy “can’t live beyond its means”.

The use of the family household budget as an image to sell one of the most devastating attacks on the welfare state, on public spending, on health and education in decades shows the level of contempt felt by Treasurer Joe Hockey and his kind for the rest of us. The simple fact is that the impacts of these cuts on working people and the poor will multiply the pressures already facing growing numbers of households today — high debt, rent and mortgage stress, employment insecurity and financial strain.

TAX BREAKS FOR THE RICH

Meanwhile, the other end of town has enjoyed tax breaks and concessions handed out by governments over the past 20 years, which has brought on a revenue crisis.

Even the Commission of Audit acknowledged this in its report. “At a current level of 21.8 per cent of GDP, tax collections are below the 20-year average of 22.4 per cent of GDP and well below the 23.6 per cent of GDP recorded in 2007/08 just prior to the global financial crisis.”

Progressive think tank The Australia Institute (TAI) did its own research and modeling last year and found “if our leaders had left the tax rates unchanged at their 2005 level then in 2013 we would have collected around $39 billion more in additional revenue”.

TAI’s modeling also showed that the top 10% of income earners in Australia received a bigger share of those tax revenues than the bottom 80% combined.

So all the talk about “sharing the load” is a smokescreen. Working-class Australians are being expected to pay for the consequences of past tax breaks for the rich, and for government spending priorities they have had no say in whatsoever.

MORE UNEQUAL SOCIETY

Meanwhile, life for the majority of Australians gets harder and Australia continues to become a more unequal society.

Levels of unemployment are hidden by the official figures, and underemployment is rife — with workers wanting more work hours to make ends meet. For young people, the rate of unemployment is more than double that of adults and the number of young people experiencing long-term unemployment has more than tripled since the global financial crisis.

The minimum wage in Australia is now just 43.3% of average full time wages — the lowest proportion on record. Twenty years ago Australia's minimum wage was the highest in the OECD at nearly 60% of average full time wages and ten years on it was hovering around 50%.

A report in the Sydney Morning Herald on May 22, revealed that Australian workers are going backwards after wage growth fell below inflation and plunged to its lowest level in 17 years. “Wages rose just 2.6 per cent in the past year. This is the weakest growth since records began in 1997 and falls well behind the consumer price index, which rose 2.9 per cent over the same period.”

The SMH also reported that economists expect that the fall in real wages will flow through to hit the economy, as already nervous households slash spending further, and that “consumer confidence has fallen at its fastest rate since before the global financial crisis”. What sad irony — when households do ‘live within their means’ we’re told it is bad for the economy.

According to research by the Australian Council of Trade Unions (ACTU), households with low paid adult employees have experienced a rise in financial stress and deprivation between 2003 and 2010.

Over that same period, the proportion of households that sought assistance from a welfare or community organisation nearly doubled, from 2.3% to 4.2%. Among households with only low-paid adult employees, the rise was even larger, from 2.4% to 6.5%.

We’re told that “now ends the age of entitlement” — but for whom? A look at the ACTU’s research also indicates that the wages' share of the national wealth in Australia has already declined to levels not seen for the past 50 years, to less than 60%. It was 63% in 1960 and as high as 75% in 1975, due to factors including increased industrial militancy.

PENALTY RATES SLASHED

The government clearly isn’t talking about ending entitlements for the big end of town, which wants an even bigger slice of the pie by attacking the minimum wage and by going after penalty rates. A full-bench decision by Fair Work Australia on May 14 is helping the government do just that. The decision means that Sunday penalty rates for the lowest paid casual hospitality workers have now been cut by 25%.

The recent decision to increase the minimum wage by $18.70 a week has been used as a pretext for the government to go on a media campaign against Sunday penalty rates in other retail industries and to call for a freeze on minimum wage increases.

The Commission of Audit report proposed cutting the minimum wage by more than $100 and then setting it to increase at levels below inflation for a decade and handing the power to set the minimum wage to the states. If it was adopted by the government, the minimum wage would fall from just over $620 a week now to about $480 a week, increasing at one percentage point less than the CPI for 10 years.

We can’t rule out the possibility that the government may move this way in future, if it thinks it can get away with it.

CUTS TO ENVIRONMENT PROGRAMS

The cuts to environmental programs announced by prime minister Tony Abbott soon after his election, which brought tens of thousands onto the streets as part of the national GetUp! climate rallies, have increased with the abolition of a number of environmental agencies and the Renewable Energy Target.

Irreversible global warming is now a real possibility. According to Climate Action Tracker, emissions reduction strategies of both the Abbott government and the ALP before it are considered to be an international joke and Abbott’s Direct Action plan will likely lead to temperature rises of 3.5 to 4 degrees Celsius by the end of the century.

The record warm temperatures in May, along with droughts, floods and bushfires, are demonstrating in practice that climate change is already having big impacts.

The budget is a recipe for revolt among young people, who will be forced to wait until they are 25 to move from Youth Allowance to Newstart if they are unemployed, and forced to live on $207 a week ($48 a week less than those on Newstart).

People under 30 who are unemployed will have to wait six months to be eligible for Newstart benefits, and will only be able to claim it for six months before the benefit is cut for another six months (unless they undertake training or study).

This six-month cycle of benefits being cut and returned will continue until a young person gets a job or turns 30. In addition, the government is expecting young people to work for 25 hours a week for the dole. This is basically the beginning of the end of benefits for young people under 30.

ABORIGINAL COMMUNITIES WORSE OFF

The attacks have left very few people unaffected. Aboriginal and Torres Strait Islander communities will have programs cut and income management extended in South Australia. Those who volunteer for the program will have half their welfare benefits controlled, while those forced onto the scheme will have 70% of their income controlled.

At the same time there will be $54 million allocated to building police stations in seven remote Indigenous communities in Queensland, Western Australia and South Australia over the next four years. Clearly policing remote communities is a higher priority than social programs according to this government.

Under the government’s strangely named “assets recycling scheme”, states will be given incentives to sell off their assets and reinvest the returns in new infrastructure projects, that is, roads projects, such as the unpopular WestConnex in Sydney and the East West Link in Melbourne.

And the budget winners — no prizes for guessing the right answer — are the rich, the mining industry and defence.

Tax breaks will be introduced for shareholders of small mining companies, mining companies will receive an exemption from an increase in the diesel fuel excise and there will be tax breaks for all mining companies due to the abolition of the Minerals Resource Rent Tax — at a loss of $3.4 billion over the next three years. Company tax will come down one and a half percentage points to 28.5% from July next year (a massive drop from a level of 49% in the mid 1980s).

To keep the military and arms industry happy, the government is bringing forward $1.5 billion in spending from 2017-18, and allowing any departmental cost efficiencies to be reinvested back into Defence, unlike the majority of other Commonwealth departments, which are expected to return any efficiencies to the government coffers.

While the GetUp! rallies were pretty impressive shows of public opposition after a long period of small turnouts to rallies in the cities, there has been a distinct change in mood since March.

A Fairfax Nielsen nationwide phone poll from May 15 to May 17, found that: 63% thought the budget was not fair compared to previous year (up 20% on previous budgets); 53% thought the budget was bad for Australia (up 11%); and 74% felt they would be worse off under the budget (up 22%).

A more recent Essential Media poll asked whether Labor should block the budget and force a new election: 47% supported the idea, including 9% of Coalition voters, and 40% opposed it.

The discussion at work, on public transport and on the streets is pretty overwhelming, and this is also reflected in the increased interest in Green Left Weekly. Just look at the reader comments on articles about the budget and letters to the editor in the dailies — these are on the whole, scathing, even now.

Even an analysis by the CSIRO and the Black Dog Institute, in partnership with Amazon (the owner of Twitter) found that normally “happy” Australians turned pretty angry on budget night, based on their tweets, according to a report in the Sydney Morning Herald.

But the biggest indicator of all is the willingness of people to mobilise in protest action in greater numbers than for some time. The 80,000 people who mobilised on March 18 around the country, followed by tens of thousands in May are a positive sign. The big student protests and now union mobilisations, including 30,000 who rallied in Melbourne on June 12, indicate the potential for a mass movement against the government’s agenda.

When the March Australia call originally sprang up, the media tried hard to ignore it. Even after the protest it was studiously ignored by media, particularly in Sydney, resulting in a huge public backlash.

One of the few journalists who wrote about March in March in the lead up to the first protest was Jenna Price, writing in the Canberra Times. In the article on February 4, she shared the views of one first time protester, in the weeks leading up to the first March in March.

Price quoted one protester Nicola Bell saying: “I'm an ordinary wife and mother; and we go to church … when I was younger, I was in the army reserve.

''I'm marching because I want to show the Prime Minister that this is not just an inner-city elite thing.''

She says she wants Abbott to take a more compassionate view on asylum seekers, on Medicare, on education.

''The government works at the behest of the people, not the other way around.

“I'm not going to give the government my silent consent … you are not doing it in my name.''

MOVEMENTS CREATE CHANGE

The article also mentioned research by Sydney University academic, Dr Ariadne Vromen, which found that only 15% of Australians have ever been on a protest march.

Hopefully that statistic has improved a bit since February, but the fact remains that although we can talk about the isolation of the left, this really puts things into perspective.

This is our challenge as socialists, playing our part to turn that 15% into 30%, 50% and more — because a rally by itself is great, but it takes a movement to make change.

[Susan Price is a national co-convener of the Socialist Alliance. This article is based on a talk at the 10th National Conference of the Socialist Alliance, held in Sydney from June 7 to 9.]

From GLW issue 1014