Unions need to deepen Abbott's budget crisis

Saturday, August 2, 2014
Thousands protest against the government during the March in March in Sydney. Photo: Peter Boyle.

It is now two and a half months since budget night. Remember Treasurer Joe Hockey and Mathias Corman smoking cigars, satisfied and smug after doing a job on Australian workers, pensioners and the poor?

The government got a free pass when the Appropriation Bills were waved through by the ALP and the Greens, despite calls to block the budget from within the Greens and strong public sentiment expressed at the March in May rallies. Only independent MP Andrew Wilkie and Palmer United Party (PUP) MP Clive Palmer were prepared to vote against the bills.

The government passed its cuts to Australia's foreign aid budget, changes to the indexation of old age pensions, cuts to legal aid, the ABC and SBS, the CSIRO and the Great Barrier Reef Authority.


The continuing public opposition to the budget, expressed at Bust the Budget rallies around the country in July, kept the pressure on the opposition parties in the Senate. As a result, about $41 billion in budget cuts are still tied up in the Senate, which is not due to resume until the last week in August. Such is the disarray in the government that a raft of budget bills have not even been tabled in parliament yet. These include a number of welfare cuts that were supposed to take effect on July 1.

The Assets Recycling Bill, which encourages state governments to sell public assets, could not be passed before the winter break, due to amendments by Palmer, the Greens and the ALP.

The carbon tax was abolished, but the Renewable Energy Target with a 2020 deadline remains, at least until the next election.

The carbon tax was only repealed after a deal was done with the PUP. The legislation was blocked in the Senate, sent back to the House and then back to the Senate again. PUP has indicated that it will vote to block the Government's bid to abolish the Clean Energy Finance Corporation and the Climate Change Authority.

The Mining Tax repeal bill was also blocked in the Senate. Amendments to the bill by the Greens, ALP and PUP would end the tax, but keep the $10 billion in welfare support spending measures it was to fund, meaning that the funds would have to be found elsewhere.

July 1 was the date set to begin a two-year freeze on the indexation of family benefits, cuts to the family benefit payment when the youngest child turns six, and changes to unemployment benefits and Youth Allowance.

The reinstatement of a biannual increase in the fuel excise, worth $2.2 billion over four years, has been effectively killed off by the Greens withdrawal of support.

Legislation for other budget measures, such as the proposed GP co-payment and the university fee deregulation, have not even been tabled yet by the government.

Palmer now says the budget is “dead in the water”. The federal government, according to Palmer, has little choice but to have a mini-budget or go back to the polls, because the bulk of its budget measures will never pass the Senate. Of course, there is a danger that Palmer could do deals to pass partial legislation (after all, he has his own interests to protect his mining wealth), and the PUP has no clear platform, in true populist style they make it up as they go along.


The rest of Australia’s corporate class are demanding that the budget bills be passed and the Senate stop misbehaving and respect the government's “mandate”. At an Australian Financial Review B20 business lunch on July 22, the heads of BHP Billiton, the ANZ Bank, Telstra and GE Mining all warned of the threat to foreign investment in Australia and economic growth if the Senate budget impasse continues. But so far, their warnings are not having much impact — at least not on the Greens and PUP.

Palmer responded that the comments were “rubbish”: "They’ve got no mandate to get rid of the schoolkids’ bonus.”

Greens leader Christine Milne said: "This is just more leaning from the big end of town. The claims of a mandate are laughable.

“We do not live in a plutocracy. We live in a democracy [and] we won’t roll over for the rich and powerful.”

But the Australian ruling class won’t give up that easily.

This might explain why the government has changed tactics and announced it will enforce the attacks on the unemployed via administrative means. The new Work for the Dole scheme and the draconian changes to unemployment benefits will force the unemployed to apply for 40 jobs a month and deny young unemployed people benefits for the first six months after they leave school. The government is banking on this being unchallenged, given it is targeting one of the least organised sectors of society.

But the budget impasse should give added confidence that this government's agenda can be defeated. The government is on the back foot, and the movement is on the front foot. Students are gearing up for national mobilisations on August 20 against education cuts, and March Australia rallies are being organised for August 30 and 31, which could potentially eclipse previous turnouts if the unions come behind them.

This makes it all the more surprising that, on the same day as the B20 lunch, the Australian Council of Trade Unions (ACTU) announced that its budget fight back “strategy” will seek to merely soften its impacts on workers through enterprise bargaining. There was no mention of an actual fight against the budget.

The ACTU’s “strategy” means that if a boss requires that an employee get a medical certificate for absence from work, then the employer would need to cough up the cost of the $7 GP co-payment. And to help them in this struggle, a “new enterprise bargaining toolkit” has been developed by the ACTU, which “will empower workers to fight back against the government’s cruel attack on hardworking Australians.”


The Save Medicare campaign in NSW wrote to the ACTU to raise concerns about this announcement. The letter said: "We are extremely concerned with a strategy that seemingly accepts and is framed solely on the basis that Abbott's attacks, including the destruction of Medicare, will actually come into law.

"A successful industrial campaign must be one that uses the united strength of the unions to prevent these measures becoming law. An industrial campaign based in achieving clauses in enterprise agreements, after the budget attacks become law, will mean leaving individual unions and individual workplaces fighting alone and would also risk leaving behind the unemployed and pensioners.

"We urge you to re-focus and re-double the efforts of the union movement to deepen Abbott's budget crisis and stop the passage of the Medicare co-payment and other budget legislation.”

The Abbott government's popularity dipped within a month of its election and it has plummeted further due to the budget anger. In the face of such popular anger and opposition, it is not time for the ACTU to give up the fight before it has even started.

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From GLW issue 1019